Daily Plan 8/10 '22
As I begin drafting this newsletter for tomorrow, I see a market slowed down by the Summer lull in volatility but still trading pretty much around my levels shared last night.
My key level from last night was 4160. I expected the market to remain soft and sell off towards 4100, if we opened or offered below it.
The overnight high in Globex, I believe was around 4155. We sold down into 4120 overnight before opening slightly higher than 4130 in the Chicago cash session.
It is here at the opening bell that I sent this tweet below expecting the market to remain soft below 4140, unless we see a rally in the XLK (tech).
4140 indeed was near the high of the cash session (at time of this post) as we gradually but steadily ebbed lower into 4114 which has been a pesky low of the day so far. About 15 handles removed from 4100 target.
The economic data was bad today. We saw the productivity numbers crashed while the unit labor costs soar. This is a potent possible sign of considerable economic slowdown, I think this is the lowest productivity reading in a while if I am correct.
Speaking of the softness, last night I had shared that while I was bearish on PLTR at 11 dollars and I expected a test of 9.67 yesterday, I was not very pleased with PLTR price action at the close when it lost that $10 support.
I expected more softness in PLTR today and I expected $9 to test. This was indeed the case as the stock lost another 7% off today and traded down towards $9.
My thoughts on the PLTR stock and my daily S&P500 levels are exclusive content for my subscribers here. I publish levels 5 days a week- come rain or shine- if you have not yet , consider subscribing to my newsletter. My intent is to share whatever I see on the tape with folks - without any bias or preset ideas.
While at first blush it seemed I was wrong on many of my earnings calls, when I became a bear, now it is seeming increasingly I was right and the trend is slowly falling back to its longer term trajectory.
I was an AMD bear at 100/101 and the stock remains weak.
I was a bear on SQ at 91 and the stock is now down almost full 10 dollars off it.
I was a bear on TSLA after its earning with my LIS at the 800 level, it sold off about 70 dollars from that level before rallying into almost 950 bucks. I remained a bear on this name at 950 refusing to chase it due to all these shenanigans around stock split and annual meetings, I was proven correct now that the stock is down almost 100 dollars into 850 area.
Numerous other bearish ideas like FDX, NVDA off 190 etc all worked very well in last week or so.
I was a bear on AAPL and PINS. While these 2 have refused to budge, at the same time they have not ran away too much from me and I think I will soon be proven correct when they make new lows.
The names that I was a bull on have continued to remain firm - specifically OXY, UNH etc
I am neither a perma-bull or perma-bear. I only follow the message of the tape and go where it takes me. In the process, I share what I see on the tape with traders, like your self.
In other news, I read how Cathie Wood of ARKK has been buying NVDA at these prices around 170-180. I personally think this is going to be a fatal mistake for Cathie’s flagship fund and she seems to have this penchant for catching these falling knives. Long term readers know, I anticipate that NVDA could sell as low as 130-135 dollars and if I have a 5 year horizon like Cathie Wood claims she has, I will not come near NVDA here so close to 180-190.
Within these SEMI stocks, if I were to be in one for next 5 years, I think , I personally think INTC offers good value. It is in FREE fall right now, but I think market is making a mistake and I think there may be a floor on this around 25-30. It is trading 34 dollars right now.
The main reason I like them is that they have a lot of these foundries in the US mainland. If I am not mistaken they have some foundries in pro US countries like India in this day and age of geo conflict.
In fact they had no foundries in the East Asia is the reason they lost the covid bounce to other competitors like AMD. I think a lot of this may get corrected now.
Do you agree?
My levels for tomorrow
So, tomorrow is the CPI day. We may see volatility and chop.
Go through my weekly plan for my overarching thought process on longer term auction: here.
So, the actual numbers come out about an hour before the open. The expectation is for the CPI to come in at 9.06% with the core coming in just under 6%, at 5.91%. I personally think it’s not going to matter a lot what the actual number is as tomorrow’s initial price action may be a head fake with clearer trend getting established a day later.
Below are a couple of things I will have in mind as the open will be full one hour after the actual release:
If the open is below 4140 but above 4090. I think this may be supported as long as the 4090 level holds for a move back into the 4150/4160 area.
If the open is above 4140 but below 4160. In my view, this may lead to a retest of lows from today around 4100.
An open below 4090 or an open above 4160 in my view will be both edge cases and may be headfakes for subsequent auctions. I will share an update on my Twitter and/or Telegram in such a case sometime before the open. Specifically , an open above 4160, keeping up with the weekly plan may target 4190.
The 3 PM cross was about 4130.
Feel free to share this free plan with folks. Subscribe below to receive much more.
Disclaimer: This newsletter is not trading or investment advice, but for general informational purposes only. This newsletter represents my personal opinions which I am sharing publicly as my personal blog. Futures, stocks, bonds trading of any kind involves a lot of risk. No guarantee of any profit whatsoever is made. In fact, you may lose everything you have. So be very careful. I guarantee no profit whatsoever, You assume the entire cost and risk of any trading or investing activities you choose to undertake. You are solely responsible for making your own investment decisions. Owners/authors of this newsletter, its representatives, its principals, its moderators and its members, are NOT registered as securities broker-dealers or investment advisors either with the U.S. Securities and Exchange Commission, CFTC or with any other securities/regulatory authority. Consult with a registered investment advisor, broker-dealer, and/or financial advisor. Reading and using this newsletter or any of my publications, you are agreeing to these terms. Any screenshots used here are the courtesy of Ninja Trader, Think or Swim and/or Jigsaw. I am just an end user with no affiliations with them.