Market analysis Jun 26th, 2024

Well, I had a much better day yesterday than Monday! It was really what we strive to call a "normal" day. Most, but not all our trades worked. Nothing crazy big on the win side. Nothing crazy big on the loss side and at the end of the day we made some good money on the overall capital deployed. It sounds strange but I don't really like the $10,000 profit days because that also implies we could have a $20,000 down day. Steady, consistent upward movement is what we desire. Let's take a look at our results. 

The market continues to keep us waiting for a new trend to follow. We had two days in a row of neutral ratings. Those are incredibly hard days for me to find solid levels to trade. We are back now to a buy rating. 

Even so. Yesterday was another "mixed bag" day. Yes the SPY and QQQ turned in green days but the IWM struggled and is now back below the 50DMA and the DIA seems to have lost all its recent steam. This is a market that is coiling and looking for its next breakout. ​

I.V. as measured by the VIX1D is still ridiculously low. Anything in the single digits is horrible for option sellers. We'd prefer it closer to 17 than 8. 

​In yesterday’s trading session, Wall Street’s major indexes ended mixed. Carnival (CCL) surged over +8% and was the top percentage gainer on the S&P 500 after the company reported upbeat Q2 results and provided above-consensus Q3 adjusted EBITDA guidance. Also, mega-cap technology stocks gained ground, with Nvidia (NVDA) climbing more than +6% to lead gainers in the Nasdaq 100 and Meta Platforms (META) rising over +2%. In addition, Capri Holdings (CPRI) advanced more than +1% after Wells Fargo upgraded the stock to Overweight from Equal Weight with a price target of $43. On the bearish side, Pool Corp. (POOL) slumped over -8% and was the top percentage loser on the S&P 500 after the company cut its full-year EPS forecast on weaker-than-expected demand.
Economic data on Tuesday showed that the U.S. CB consumer confidence index edged down to 100.4 in June, stronger than expectations of 100.0. Also, the U.S. June Richmond Fed manufacturing survey fell to -10, weaker than expectations of -3. In addition, the U.S. S&P/CS HPI Composite - 20 n.s.a. eased to +7.2% y/y in April from +7.5% y/y in March (revised from +7.4% y/y), stronger than expectations of +7.0% y/y.
Fed Governor Michelle Bowman stated Tuesday that she sees several upside risks to the inflation outlook and reiterated the necessity of maintaining elevated borrowing costs for an extended period. “We are still not yet at the point where it is appropriate to lower the policy rate,” Bowman said. During a moderated discussion following her speech, the Fed governor stated that she does not foresee any interest rate cuts this year. At the same time, Fed Governor Lisa Cook indicated that she sees it as appropriate to lower interest rates “at some point,” noting her expectation of gradual inflation improvement this year followed by more rapid progress in 2025. “The timing of any such adjustment will depend on how economic data evolve and what they imply for the economic outlook and balance of risks,” Cook said.
Meanwhile, U.S. rate futures have priced in a 10.3% chance of a 25 basis point rate cut at the next FOMC meeting in July and a 57.9% chance of a 25 basis point rate cut at the September FOMC meeting.
The focus this week will be on the May reading of the U.S. core personal consumption expenditures price index, the Fed’s first-line inflation gauge, set to be released on Friday.
On the earnings front, notable companies like Micron Technology (MU), General Mills (GIS), Paychex (PAYX), Levi Strauss (LEVI), and AeroVironment (AVAV) are set to report their quarterly figures today.
On the economic data front, investors will direct their attention to U.S. New Home Sales data, set to be released in a couple of hours. Economists, on average, forecast that May new home sales will come in at 636K, compared to the previous number of 634K.
The U.S. Building Permits data will come in today. Economists expect May’s figure to be 1.386M, compared to 1.440M in April.
U.S. Crude Oil Inventories data will be reported today as well. Economists estimate this figure to be -2.600M, compared to last week’s value of -2.547M.
Later today, the Federal Reserve will release the results of its annual stress test for the biggest U.S. banks.

In spite of the technicals I'm leaning bearish today. FDX earnings pumped the futures initially but they've since lost all that momentum. 

Trade docket for today: /MCL, /NG, CCL, CRM?, FDX, GIS, GLD/NEM?, ODTE's, NVDA, ORCL?, PAYX, SMCI?, MU, LEVI, SPY/QQQ.

Intra-day levels for me:
/ES; 5542/5551/5558/5570 to the upside. 5532/5526/5519/5510 to the downside.

/NQ; 20067/20085/20172/20223 to the upside. 19946/19915/19863/19808 to the downside. 

Bitcoin; Slide continues. Resistance now 63,550 and support is 60,357 with 58,423 the next level down if we break 60,357

Lets have another "normal" day today!