SpySooooo.. the technicals are flashing red.
No earnings
No fed Speak
No economic data
We'll need a catalyst to get the reset going.
There are 2 catalyst
1. Tariffs
2. 30yr bond auction Thursday
I actually think between July 7th- 17th
We will retest the previous high between 610-611. Depending on how long this takes the 20sma should gravitate toward 610 by the End of this week.
The last two major Pullbacks actually took 2weeks and the price action was terrible. I circled it to illustrate
And this is why I said this pullback could take up to July 17th to complete.
July 18th is the kick off of big bank earnings and let me tell you from experience, you don't want to be going into earning season short especially if seasonality is against you.
Banking sector
AMEX:XLF
I think price pulls back with the rest of the marker but pushes back up to 54-55.00
With bank earnings
From there I expect a bigger correction
Weekly chart says banks won't make it out of July alive . Most likely a sell back to 49-50 or 10% drop
I would say this market would on be bearish with a close back beneath 600.00 on spy.
The problem with that is, not every big tech stock is overbought and some actually look like they are about to rally higher.
Here's an example of what I mean
So here's NASDAQ:SMH or chip sector which is a reflection of Nvda and TSM
Weekly technicals are saying a pullback is coming for this sector!
RSI, Moneyflow are too overbought on both weekly and daily time frames so I'm expecting weakness here over the next few weeks.
On the other hand you have
AMEX:XLY
This is the sector that reflects
Amzn and Tsla
The white line represents the resistance price was consolidating behind for 2months.
The purple circle represents a major bullflag
The green line is the V shape recovery that I think is about to happen with this sector this quarter.
Price may retest 217-218 but if that holds this sector and the stocks in it will outperform.
So what happens with the Spy if let's say you have
Msft
Nvda
Avgo
Tsm
All red
And then
Amzn
Tsla
Googl
Aapl
Mostly green?
Fawkery lol.
And this is why I say a pullback to 610 and then we'll see..
AMEX:IWM and TVC:DJI still have a little room left to move higher but both are supper extended on the daily time frame and I expect a pullback from them this week
There is 2 red flags I see on a bigger time frame and that is TVC:NYA and TVC:VIX
NYA weekly chart
Near the top of rising wedge here which means for the broader marker you will start seeing weakness in a few weeks
Price could grind up here for a few weeks but I doubt we break above 21,000
Vix
Daily chart and RSI
Is screaming that a move to 23 is imminent
If the vix pops back above 20 I can't see the Spy holding above 620
Trade ideas
NASDAQ:TSLA
I like calls above 322.00
Target 332.
Have patience for the move above 322, tsla is beneath all its moving averages right now!.
332 will be tough, if price can break above that then 347 is next up
NASDAQ:QQQ
557 is resistance .
I like the short to 552 gap support. At 552 I'd cover and wait for a break below 548.00 to short to 544..
Below 543.00 and we close gap at 539. I don't think price will drop back below 539 before tech earnings
Be careful about swinging short, it will only work if there is a vicious sell off. Otherwise you will find yourself with annoying small gap ups that will drag this out like I highlighted above on the Spy chart with the last to previous Pullbacks.
So what I'm looking for over the next 2 weeks is a retest for Spy 610 and qqq 540. Then we go into earning season
