Market analysis for July 26th, 2024

7/26/2024

Welcome back traders and happy Friday! We didn't make much progress yesterday as I had to roll both put and call sides of some of our 0DTES. We did have some success with Scalping and our NDX event contract 0DTE. Both of these can provide some needed buffers when the market is crazy. If you'd like to trade these daily setups with us I'll provide the links below.

Some of you have inquired about access prop funds to trade with. I love and endorse Apex. I think its a great training tool. You can check it out here.

While our results from yesterday didn't look very good, our rolls into today look to hopefully yield some good results. Here's what we did achieve yesterday.

Technicals are still in sell mode but it wouldn't take much to flip back to buy mode. We seem overstretched to the downside.

Yesterdays price action didn't do much to change the directional landscape. A nice push up and then a finish at the days lows.

With the exception of the Russell, which is on a parabolic rip, all the indices we trade are still stuck around the new support/resistance area that was established about one month ago.

The fear and greed index is starting to flash a buy signal

Tech was ugly yesterday but the overall market actually looked pretty healthy.

In yesterday’s trading session, Wall Street’s major indexes closed mixed. Edwards Lifesciences (EW) plummeted over -31% and was the top percentage loser on the S&P 500 after the company reported weaker-than-anticipated Q2 revenue, issued lackluster Q3 guidance, and cut its annual guidance for sales of some heart valve replacements. Also, Lululemon Athletica (LULU) slumped more than -9% and was the top percentage loser on the Nasdaq 100 after Citi downgraded the stock to Neutral from Buy. In addition, Ford Motor (F) tumbled over -18% after the carmaker reported downbeat Q2 results. On the bullish side, ServiceNow (NOW) surged more than +13% and was the top percentage gainer on the S&P 500 after the company posted upbeat Q2 results and raised its FY24 subscription revenue guidance. Also, International Business Machines (IBM) climbed over +4% and was the top percentage gainer on the Dow after the IT giant reported better-than-expected Q2 results and raised its full-year free cash flow forecast.
The U.S. Department of Commerce’s preliminary reading on Thursday showed that the U.S. economy grew at a +2.8% annualized rate in the second quarter, surpassing the +2.0% consensus estimate and accelerating from +1.4% in the prior quarter. Also, the U.S. Q2 core personal consumption expenditures price index rose +2.90%, slowing from +3.70% in Q1. In addition, U.S. June durable goods orders unexpectedly plunged -6.6% m/m, weaker than expectations of +0.3% m/m, while U.S. June core durable goods orders rose +0.5% m/m, stronger than expectations of +0.2% m/m. Finally, the number of Americans filing for initial jobless claims in the past week fell -10K to 235K, compared with the 237K expected.
“Goldilocks is getting stronger and the risk of stagflation is fading,” said David Russell at TradeStation. “There’s not much ‘stag; and not much ‘flation’. This kind of GDP report is a potential tailwind for corporate earnings that keeps us on pace for lower rates going forward.”
Meanwhile, U.S. rate futures have priced in a 6.7% chance of a 25 basis point rate cut at next week’s monetary policy meeting and a 99.8% probability of at least a 25 basis point rate cut at the conclusion of the Fed’s September meeting.
On the earnings front, notable companies like Bristol-Myers Squibb (BMY), Colgate-Palmolive (CL), Charter Communications (CHTR), and 3M (MMM) are set to report their quarterly figures today.
Today, all eyes are focused on the U.S. core personal consumption expenditures price index, the Fed’s preferred price gauge, set to be released in a couple of hours. Economists, on average, forecast that the core PCE price index will stand at +0.2% m/m and +2.5% y/y in June, compared to last month’s figures of +0.1% m/m and +2.6% y/y.
U.S. Personal Spending and Personal Income data will also be closely monitored today. Economists forecast June Personal Spending to be at +0.3% m/m and June Personal Income to come in at +0.4% m/m, compared to the May numbers of +0.2% m/m and +0.5% m/m, respectively.
The U.S. Michigan Consumer Sentiment Index will be reported today as well. Economists estimate this figure to arrive at 66.0 in July, compared to 68.2 in June.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.252%, down -0.17%.

PCE numbers out shortly, should be the news catalyst for the day. My bias for today is bullish.

Our trade docket for today: DELL, DIA, BMY, DLR, IWM, NVDA, QQQ/SPY, LULU, DXCM, SNOW, 0DTE's.

Intra-day levels for me:
/ES; 5494/5509/5533*(50 period M.A. on 2hr. chart)/5572 to the upside. 5472/5454/5432 to the downside.