Hello traders and investors!
1. Fed SOMA balance and market summary
The current market has been volatile and event-driven, without enough power to have substantial upside or downside momentum. Thursday, Nov 17 CPI is the next key event to drive the market. We are expecting $SPY to continue to trade inversely on the USD index and potentially be very choppy until the CPI number. Reducing trading activities might not be a bad idea in this directionless and choppy market.
There are several bearish factors on top of Powell’s hawkish statement during FOMC last week:
(1) Fed speeds up on decreasing its SOMA balance from $8.19 tn to $8.16 tn in the past 7 days. Watch the US stock market could have more downside pressure.
(2) Over the weekend, China reiterated firm adherence to zero-covid approach at Saturday's press conference. Chinese #stocks $BABA $BIDU $JD $NIO $XPEV etc. and companies with revenues heavily relying on China $WYNN $TSLA $AAPL $NKE etc. could gap down on Monday (https://twitter.com/Sino_Market/status/1588788560299454464?s=20&t=VGLCsGDBsdZfKHQXxM4mdw )
(3) All the Fed speakers this coming week are hawkish.
(4) The tech industry is extremely heavy to the downside amid lots of lower-than-expected guidance
2. Some important events this week:
3. Fed speaker this week
Fed Speakers Schedule for this week. It looks like a very hawkish week!
Monday 11/07
Loretta Mester (Hawk) 3:40 pm EST
Tom Barkin (Hawk) 6:00 pm EST
Thursday 11/10 (schedule unknown)
Waller (Hawk)
Harker (Hawk)
Logan (Hawk)
Mester (Hawk)
George (Hawk)
3. Individual Charts to watch
3.a. $SPY
Downside: 369.02, 363.29, 357.04
Upside: 376.95 holds, room to 380.58, 383.81, 384.87, 390.01
Comment:
Daily uptrend has broken. Once the daily EMA support 376.95 breaks, we should see more room for the downside.
The current market has been volatile and event-driven, without enough power to have substantial upside or downside momentum. Thursday, Nov 17 CPI is the next key event to drive the market. We are expecting $SPY to continue to trade inversely on the USD index and potentially be very choppy until the CPI number. Reducing trading activities might not be a bad idea in this directionless and choppy market.
Possible Action (no action yet): continue to daytrade and quick in and quick out.
3.b. $TSLA
Downside: 201.46, 198.59, 187.6 weekly 200 day EMA support
Upside: 214.57 daily EMA support breaks above and holds, room to 220.94, 227.64
Comment:
TSLA: Endless drama after Elon acquired Twitter and lay off 50% of Twitter staff. Tesla investors worry about Elon getting distracted plus Elon might have to sell more Tesla stocks to cover potential lawsuits from Twitter employees.
Weekly is shaping out to be a big bear flag, ideally, we had this similar setup before and it didn't break down, if we do break down this week, let's assume due to CPI or whatever that may be, we like 180s as a target to the downside on this bear flag!
Possible Action (no action yet):
$TSLA 15 mins 204 breaks below and $UUP breaks above 30, $TSLA weekly 200p long or $TSLA weekly 197.5p long
3.c. $MRNA
Downside: 152.83, 148.96
Upside: 160.58 breaks, room to 166.76, 172.44, 173.18
Comment:
Both daily and weekly chart bull flagging after the earnings and some positive news on COVID19 booster shots. There is also an upcoming phase 2 clinical trial results on heart failure VEGF-A vaccines.
Possible Action (no action yet):
$MRNA weekly 170c when 160.58 breaks on the 15 mins or hourly charts depending on the risk tolerance
3.d. $LLY
Downside: 357.4, 355.22, 350.48
Upside: 365.88 breaks, room to 371.5, 374.90
Comment:
Both daily and weekly chart bull flagging after the earnings
Possible Action (no action yet):
$LLY weekly 370c when 365.88 breaks on the 15 mins or hourly charts depending on the risk tolerance
3.e. Cryptocurrency
It is worth mentioning that both Bitcoin $BTC Ethereum $ETH has formed a bottom at $20K and $1200 per coin, respectively no matter how many rate hikes Fed announced. We could deem these levels as solid support for long-term crypto investors, and adding positions slowly for the long term might be an option here.
For other crypto news for the Week of Nov 6: Solana, Polygon, Dogecoins, and Fidelity Crypto Trading, feel free to check the post by our partner here!
Best,
Moneypig Trading Team