Market analysis for July 1st, 2024

Welcome to a new week traders! This is a holiday shortened week with the markets closed Thursday for the 4th of July holiday. Our week ended o.k. on Friday  with scalping really pulling its weight. 

Today's  trade docket will be focused on our seven 0DTE setups, using futures. We had the /ES debit cover which expires today. That looks well positioned to start the day and has a good chance of expiring fully profitable on its own. Our /ES stand alone has the put side already in place. It looks good right now but is tight. We'll see how that one progresses today and we may be able to get a call side added. With /NQ we have the debit put cover that we rolled out to Friday. We'll work that today either with more puts with a 0DTE expiration of possibly calls, depending on the price action today. Event contract 0DTE's should be posted in discord in hte next 30 minutes.

Lets take a look at the markets. Technicals are flashing a slight bearish lean but its not very strong.

Basically, we continue to coil here. Credit to the IWM and DIA though. They are both holding above their respective 50DMA, which has been tough for them.

To get a better "overall" view of the markets bias I like to use the VTI. Our swing trade setups on this have been money this year but we don't currently have a setup to initiate a new trade. It certainly looks like it wants to roll over. We are just waiting on a MACD confirmation to enter a potential short swing trade.

We don't have much in the way of earnings trades this week. We do have a couple of potential news catalysts in the form of FOMC minutes on Weds. and NFP on Friday. With the holiday shortened week, Friday may be our best opportunity for trade setups. 
Let's take a look at the weekly expected moves. They are depressing, to say the least, from a credit traders perspective. This means, most likely that we will be looking at more debit trades this week. Agian, Friday may be our best day with NFP to get some movement.

Looking at the VIX1D (One day ViX) you can see the problem. 

A grind higher will make this low I.V. enviroment even worse. We NEED some downward movment to get I.V. back to where we like it. 
You can see last weeks performance didn't have many standouts. 

The number of stocks below their 50/200 DMA's is also a concern for the bulls 

The Fear/Greed index also shows the complacency. 

The visual of last weeks market doesn't show many sector trends firming up either. 

My lean for today is of so slightly bullish. In spire of the weak results last week and the lack of strength in the tecnicals, I think the futures pointing up this morning gives us a clue that the market wants to, if nothing else, hold here. 

​In Friday’s trading session, Wall Street’s major averages closed lower. Nike (NKE) tumbled about -20% and was the top percentage loser on the S&P 500 and Dow after the world’s largest sportswear company reported weaker-than-expected Q4 revenue and provided FY25 revenue guidance that fell short of analyst estimates. Also, Kura Sushi USA (KRUS) plunged more than -23% after reporting disappointing preliminary Q3 results and cutting its full-year revenue guidance. In addition, Accolade (ACCD) plummeted over -43% after the company issued below-consensus Q2 and FY25 revenue guidance. On the bullish side, Infinera (INFN) climbed more than +15% after Nokia Oyj agreed to acquire the company in a deal valued at about $2.3 billion.
Data from the U.S. Department of Commerce on Friday showed that the U.S. core PCE price index, a key inflation gauge monitored by the Federal Reserve, came in at +0.1% m/m and +2.6% y/y in May, in line with expectations. Also, the U.S. Chicago PMI rose to a 7-month high of 47.4 in June, stronger than expectations of 39.7. In addition, U.S. May personal spending rose +0.2% m/m, weaker than expectations of +0.3% m/m, while U.S. May personal income rose +0.5% m/m, stronger than expectations of +0.4% m/m. Finally, the University of Michigan’s gauge of consumer sentiment was revised upward to 68.2 in June, stronger than expectations of 66.0. 
“From the market’s perspective, [Friday’s] PCE report was near perfect. The Fed’s favorite inflation indicator not only showed inflation was moving towards the Fed’s inflation target but that the economy was resilient. Consumer spending was on the rise and take-home pay was also up after a couple of sluggish months,” said David Donabedian at CIBC Private Wealth U.S. 
Richmond Fed President Thomas Barkin remarked on Friday that the battle against inflation has not yet been won, emphasizing that the U.S. economy is expected to stay resilient as long as unemployment stays low and asset valuations remain high. Also, Barkin noted, “Given the remarkable strength we are seeing in the economy,” he is receptive to the notion that the longer-term equilibrium rate balancing supply and demand “has shifted up somewhat” and that policy may not be as restrictive as perceived.
U.S. rate futures have priced in a 10.9% chance of a 25 basis point rate cut at July’s monetary policy meeting and a 56.3% probability of a 25 basis point rate cut at the conclusion of the Fed’s September meeting.
Meanwhile, the U.S. stock markets will close early at 1 p.m. Eastern Time on Wednesday and remain closed on Thursday for the Independence Day holiday.
The highlight of the holiday-shortened week will be the U.S. Nonfarm Payrolls report for June. Also, investors will be eyeing a spate of other economic data releases, including U.S. JOLTs Job Openings, ADP Nonfarm Employment Change, Initial Jobless Claims, S&P Global Composite PMI, S&P Global Services PMI, Factory Orders, ISM Non-Manufacturing PMI, Crude Oil Inventories, Average Hourly Earnings, and Unemployment Rate.
Market participants will also be focused on remarks from Fed Chair Jerome Powell, who, along with New York Fed President John Williams, is set to participate in the European Central Bank’s annual forum in Sintra, Portugal this week.
In addition, investors will be keeping an eye on the release of the Fed’s minutes from the June meeting on Wednesday, which may provide further insights into the policymakers’ views on inflation, interest rates, and the economy.
Today, all eyes are focused on the U.S. ISM Manufacturing PMI, set to be released in a couple of hours. Economists, on average, forecast that the June ISM manufacturing PMI will come in at 49.2, compared to the previous month’s value of 48.7.
Also, investors will focus on the U.S. S&P Global Manufacturing PMI, which stood at 51.3 in May. Economists foresee the June figure to be 51.7.
U.S. Construction Spending data will be reported today as well. Economists foresee this figure to stand at +0.3% m/m in May, compared to the previous number of -0.1% m/m.

Intra-day levels for me:
/ES; 5539/5557/5570/5584 to the upside. 5528/5510/5495/5474 to the downside. 

/NQ; 20044/20137/20193/20272 to the upside. 19903/19820/19738/19675 to the downside. 

Bitcoin: BTC is trying to build a base here. It hasnt been very successful as of late but keep in mind it is still up over 45% on the year. Support has been 60695 with resistance up at 66000.

Let's have a great, shortened trading week folks!