Market analysis for July 17th, 2024

Welcome to the jungle. The rotation out of techs continues this morning. We've been setting up for this for weeks now. Some of our members patience was being tested but the payoff seems near.

Our results yesterday were perfect. When I say perfect I mean everything we touched hit for a full profit. I'm humble enough to always say that when those rare days occur it's luck. That's just not how trading works. In fact, one of the biggest challenges I see with new traders is the idea that if they get good enough, somehow, they will be able to avoid losses. Losses are a part of the game and will ALWAYS happen. All we can do as traders in put our selves in the best position we can. Here's our results from yesterday.

A couple quick notes on the above matrix. These are JUST our day trades. We work 15-30 other weekly trades. I'm also going to add our /MNQ futures trade to this matrix starting today. We are currently short with a put cover that we are rolling each day. I have four short /MNQ contracts using about $9,000 in buying power and generating about $120 a day in cash flow. This hedge can be long or short, depending on my market bias but obviously right now, with the markets bouncing around all time highs, I'm short. 
Also a quick note, once again, about the importance of having multiple irons in the fire. Scalping has been a huge help to us. Today looks to be another nice opportunity. Our event contract 0DTE's have been amazing. Sure we only had $18.50 in the NDX yesterday but 370% ROI is not a bad risk/reward!
Finally, I will say this again. I don't know of another place where you can go to find seven 0DTE opportunities a day! Combine that with our track record this year of an annualized return of $400,000 dollars on about $35,000 of capital. Here's our results YTD of our documented SPX/NDX combos. Almost $160,000 profit on NDX and almost $60,000 profit on the SPX. Add in about $8,000 of profit on our Event contract 0DTEs and the fact that I don't know of another place that offers up daily 0DTE opportunities on both Bitcoin and Etherium and I feel comfortable saying, we're doing pretty good.

On to the markets.
Gold has broken out to a new ATH. This is bearish for equities. 

1. Tech stocks are falling like we are entering a bear market
2. Small cap stocks are rising like the bull market just began
3. Gold prices are rising like we are entering a recession
4. Bond prices are falling like the economy is strong
5. Oil prices are falling like rate cuts are cancelled
6. The S&P 500 is rising like rate cuts already began
This is a very confused market!

September S&P 500 E-Mini futures (ESU24) are down -0.79%, and September Nasdaq 100 E-Mini futures (NQU24) are down -1.22% this morning as concerns over stricter U.S. restrictions on Chinese trade and semiconductor technology weighed on sentiment, while investors awaited a fresh batch of U.S. economic data and the next round of corporate earnings.
Bloomberg News reported on Wednesday that the Biden administration has informed allies that it is contemplating deploying the most stringent trade measures possible if companies like Tokyo Electron and ASML Holding persist in providing China with access to advanced semiconductor technology. Seeking leverage with allies, the U.S. is considering whether to implement a measure known as the foreign direct product rule, which allows the country to impose controls on foreign-made products using even the smallest amount of American technology, according to the report. The U.S. is presenting this idea to officials in Tokyo and the Hague as a scenario that is becoming increasingly probable if these countries do not strengthen their own measures against China.
In yesterday’s trading session, Wall Street’s major indexes ended in the green, with the benchmark S&P 500 and blue-chip Dow notching new all-time highs. Match Group (MTCH) climbed over +7% after activist investor Starboard Value disclosed a stake of around 6.6% in the dating app company and advocated for a turnaround or potential sale. Also, UnitedHealth Group (UNH) advanced more than +6% and was the top percentage gainer on the Dow after the insurer reported upbeat Q2 results and backed its full-year adjusted EPS guidance. In addition, Bank of America (BAC) rose over +5% after the number two U.S. lender reported better-than-expected Q2 net interest income and provided an above-consensus Q4 net interest income forecast. On the bearish side, Charles Schwab (SCHW) plunged more than -10% and was the top percentage loser on the S&P 500 after reporting fewer-than-expected new brokerage accounts in Q2.
Economic data on Tuesday showed that U.S. retail sales were unchanged m/m in June, stronger than expectations of -0.3% m/m, while May’s reading of +0.1% m/m was revised upward to +0.3% m/m. Also, U.S. June core retail sales, which exclude motor vehicles and parts, rose +0.4% m/m, stronger than expectations of +0.1% m/m. In addition, the U.S. import price index was unchanged m/m in June, weaker than expectations of +0.2% m/m. 
Meanwhile, U.S. rate futures have priced in a 6.7% chance of a 25 basis point rate cut at the next central bank meeting in July and a 93.3% chance of a 25 basis point rate cut at the September FOMC meeting.
Second-quarter earnings season is gathering pace, with investors awaiting fresh reports from notable companies today, including Johnson & Johnson (JNJ), Elevance Health (ELV), Prologis (PLD), U.S. Bancorp (USB), Kinder Morgan (KMI), United Airlines (UAL), and Ally Financial (ALLY).
On the economic data front, investors will focus on U.S. Industrial Production data, set to be released in a couple of hours. Economists, on average, forecast that June Industrial Production will arrive at +0.3% m/m, compared to the previous figure of +0.9% m/m.
The U.S. Building Permits (preliminary) and Housing Starts data for June will be reported today. Economists forecast Building Permits to be 1.400M and Housing Starts to be 1.300M, compared to the previous numbers of 1.399M and 1.277M, respectively.
U.S. Crude Oil Inventories data will come in today as well. Economists estimate this figure to be -0.900M, compared to last week’s value of -3.443M.
In addition, market participants will be looking toward speeches from Richmond Fed President Thomas Barkin and Fed Governor Christopher Waller.
Later today, the Federal Reserve will release its Beige Book survey of regional business contacts, which includes anecdotes and commentary on business conditions in each of the 12 Fed districts. The Beige Book is published two weeks before each meeting of the policy-setting Federal Open Market Committee.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.159%, down -0.07%.

With the slide in futures this morning we are back to Neutral technical rating

I've been taling about the laggard indices of the IWM and DIA for a long, long time. I said that this divergence won't last. It never does. Either the SPX and NDX will come down or the IWM and DIA will come up. It looks like it's the latter. Talk about parabolic moves!

We are currently short the NDX via an /MNQ futures position. I'm looking today to take a possible short in /M2K.
Bollinger bands and Keltner channels are blown through. Move is wayyyyyy beyond Avg. True range. Stoc and RSI are pinned at overbought. 

Trade docket for today: /MNQ, DELL, DIA, FSLR, NEM/GLD combo, NVDA. We have CCI, DFS, UAL, BX, NDK, DPZ as all potential earnings plays and the /M2K short,cover trade. Of course we'll be looking to work our seven 0DTE opportunites. Our SPX debit is already set for a $500 profit at the open. I'll also look to get our VTI monthly swing trade on.

My bias for today is bearish. 

We have had so much success with our VTI monthly swing trade. 2-4% a month profit. Easy peasy setup. Doesn't need a lot of monitoring. Just a really, really great trade. We haven't gotten a clear signal this month to get one in place! Today is the day. We'll be lucky to make 1.5% this go around but...it's only a three day trade!

Intra-day levels for me:
/ES; 5672/5683/5691/5702 are resistance levels to the upside. 5655/5639* (key level! PoC on 2hr. chart)/5613/5595*(key level! below here is "look out below".)

/NQ; The index looks weak. We are below PoC. Below 50 period moving avg. on 2hr. chart and now, breaking below 200 period moving avg. 20419/20515/20593/20633* (key level. PoC on 2 hr. chart) are resistance levels. Bulls need to reclaim the 20633 level to keep the uptrend in place. 20234/20205/20116/20005 to the downside.

Bitcoin; It looks like the near term bottom is in on BTC. 65,945/66318 are new resistance levels and 64,049/63,489 are support. 

Let's have a great day folks! Who knows what the market will do today? Who know how our trades will turn out? There are no guarantees in trading but....I'm confident that today, just like most days, our trading system will offer us the ability and opportunity to make more than $1,000 dollars today. Just like it does almost every day. Will we succeed? Check back tomorrow! We don't know right now but...the opportunity is there for us with the systems we've created. For that, I'm grateful.