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The week started off on Monday with the market gapping down and printing red names across the board.

There are a number of stacked catalysts to watch out for this week. 

The SPX index rollover continues this week. This is when big money sells and rolls into their further-out quarterly expiration contracts. So far, this has caused big moves to the downside. 

We also have a large option expiration event called triple quad witching. Look for options to expire and for premiums to be affected by this.

As we head into a new quarter, we also have S&P rebalancing. This involves big funds and firms needing to rebalance their portfolios and follow rules that allow them a certain number of stocks and sectors.

To top it off, the Federal Open Market Committee (FOMC) statement addressing the interest rates decision will be released in the afternoon on Wednesday, June 15. This will be followed up with a statement by Federal Reserve Chairman Jerome Powell.

The S&P 500 (/ES) sold off at the end of last week to $3,900. This week started with a major gap down to the previous low of the year at $3,807.

Be mindful of the key zone from $3,807 to $3,855 as this will be our compass for the next market pop or drop. 

Above this zone, the market could seek liquidity toward $3,900 to $3,930.

If the /ES doesn’t break above $3,807, we could see chop or a flush lower potentially to $3,656.

Here is our focused list:

NVDA — NVDA is trading near two major key levels at $155.67 and $152. If NVDA holds this $152 to $155 zone, focus on a pop above the trendline structure at $162. Through $162, look for NVDA to hit $167 and fill the gap to $168. If NVDA can’t break through $162, we could see chop or a drop toward the $155 to $152 zone. Below this, we’ll look for it to hit $148 to $142.

SHOP  — SHOP is nearing major levels from $308 to $305. SHOP could pop from $305 to the $334 to $340 zone and fail. If SHOP can get through this zone, then $350 to $360 is possible. If SHOP fails to break through $322 and fails at $305, look for it to hit $282 and then potentially buy the dip.

AAPL — We’re using AAPL as a major compass for the market. If AAPL holds $132, it could fill the gap to $137. Through $137, we have $141 as the next target. If AAPL breaks $132, be aware of potential chop or a drop to $129.

ROKU — Employees started a rumor last week that Roku might join Netflix. On Monday, ROKU closed below the key level at $75. If ROKU breaks above $75, it could work its way toward $80 and then the $83 to $85 zone. If ROKU fails at $75, we could see a drop to $67.

Stay Focused!

 

 

Next week will be anything from dull as we have a big options expiration on Friday, June 17th. There are a record number of options set to expire that could lead to high volatility.

The market gapped down on Friday, and the S&P 500 (/ES) flushed to $3,900. Heading into next week, we’ll look to short any bounces.

In the video above, we’ll list names on our bearish watchlist like SPX, DKS, and ABNB and review bullish setups on energy (XLE) and natural gas (UNG).

Stay Focused!

 

After a 9-day consolidation, the markets finally broke out of the range on Thursday with a big flush to the downside.

 

 

After testing support near the recent lows on Friday, the big question next week is whether or not the market bounces off support or if support breaks for a further flush to the downside.

Keep in mind that next Friday, June 17th is a big options expiration. There are a record amount of expirations set to expire Friday afternoon. 

Any time we head into a big expiration event, there is potential for wild back-and-forth action. With this volatility comes the opportunity for great day trades. 

 

 

Be prepared to focus on lower time frame setups early next week. Volatility and the daily expiration on S&P 500 (SPX) options can make for great daily “income” trades.

On the swing side, we need to see how next week unfolds into Friday’s expiration to understand the next direction better. 

As long as the indices are trading under the daily 21 exponential moving average (EMA), our primary focus will be on shorting any bounce in the downtrends. For bullish setups, we still like XLE, OXY, UNG, and a few others that we’ll cover in the Sunday video.

Markets like these are far from dull. While they aren’t “easy,” they still offer opportunities if we focus on the right things. Shorting bounces in bearish structure (red Big 3 bars) and buying the dips in bullish structure (green Big 3 bars) is a strategy that has withstood the test of time. That will continue to be our focus in this wild market. We’ll look for clean setups using our Big 3 indicator on Monday in the Compounding Growth Mastery together.

Stay Focused!

 

 

The next major catalyst we’re focusing on is the Consumer Price Index (CPI) report released at 8:30 a.m. Eastern on Friday. Pay attention to this report as it gives insight into inflation and how much consumers are spending.

The market rolled over on Thursday ahead of the CPI report. We’ll see if this report pops the market back into its range or drops it further.

Depending on what happens with the CPI report, we’ll wait for the Federal Open Market Committee (FOMC) statement by Federal Chairman Jerome Powell at 2:00 p.m. Eastern on Wednesday, June 15th.

We’re continuing to focus on the structure of the S&P 500 (/ES) daily chart to the downside. 

 

 

On Thursday, the /ES hit this structure and broke through major inflection points. The /ES dropped to close the day on the point of control (POC) at $4,013.50 and below the 4-hour Ichimoku Cloud.

In the video above, we’ll break down where the market could further break out of its range, define key levels on the major indexes and Volatility Index (VIX), and review our focused list setups on SHOP and AAPL.

Stay Focused!

 

 

After a short week last week, our focus is on structure. 

The S&P 500 (/ES) is trading below its trendline structure, which leads us to lean more bearish. On Monday, the /ES gapped up and failed to key levels.

The major catalyst this week is the Consumer Price Index (CPI) report released on Friday. We’ll follow up in the Thursday newsletter to hone in on how this inflation report can affect price action.

We’re also watching two specific events on SHOP and AMD.

On Tuesday, the SHOP 10:1 stock split voting will occur. On Wednesday, AMD has a financial analyst day, which could impact price.

In the video above, we’ll review the new liquidity levels on /ES, lay out key zones and structures, and walk through our favorite setups that we’re keeping an eye on.

 

 

Here is our focused list:

SHOP — There is a large flag forming. Be patient for the stock split news as this will be a large catalyst, up or down. If SHOP works its way up to $383 and the daily 21 EMA, this could be a short opportunity. If SHOP moves through $383, we can look for it to move to the trendline structure. The same goes for the downside. If SHOP breaks $383 and moves lower, we can look for it to break to the trendline and either pop back or drop lower.

AMZN — This is the first week since the 20:1 stock split. Practice patience and observe the options premium. AMZN has a big gap to fill from $130 to $140. If AMZN continues to fail at its key zone and reverses, we’ll look for a short to the $121 range with the daily mean near $118.

AAPL — If AAPL pops toward $148 and above the daily mean, we could look to short it. Note that POC is at $145.44. If AAPL fails and drops, see if it breaks structure and heads toward the $140 range. If AAPL holds POC, AAPL could pop to $152 to $154.

Stay Focused!

 

 

 

Options traders must be aware of quarterly expiration on Thursday, June 30th. There are similar structures on the S&P 500 (SPX) between this week’s structure and the structure in March 2022 (the previous quarterly expiration).

We’ll observe the short-term and long-term structure and price movement we could expect heading into the rest of the year.

In the video above, we’ll lay out potential plays on SPX and review names on our watchlist including XLE, XOM, CHK, and more.

Stay Focused!

 

As options traders, there are certain expiration dates we want to be mindful of. Bigger than them all are quarterly expirations.

The next quarterly expiration series is on Thursday, June 30th. We’re seeing similarities between the current market and the structure in March 2022 (the previous quarterly expiration).

 The overall structure of the market remains bearish. We don’t see that changing anytime soon. 

What we’re discussing here is “short-term thinking”. 

Looking at the chart of the SPY futures below, you’ll notice a similar pattern to what we saw back in March:

• Consecutive closes above the daily 21 exponential moving average (EMA)
• Positive shift of the histogram
• Big 3 Bars going red to the yellow

 

 

This doesn’t mean the market is suddenly bullish. Nor does it mean the market doesn’t roll over from here. This potentially suggests the market is positioned to crush shorts into quarterly expiration, just like it did in March. If this is the outcome, we’ll have a 2- to 3-week window to take advantage of the “put destruction” by pursuing long positions or credit spreads on SPX.

If we see a close back under the daily 21 EMA, the chances of any short squeeze from here are slim.

Another suggestion: Consider opening a few deep out-of-the-money (OTM) iron condors. This week, we sold an iron condor on SPX for the quarterly expiration. We sold calls and puts 9% above/below the current price. These iron condors make for great “income-producing” trades while we wait for clarity regarding the next directional move. 

Stay Focused!

 

 

The final catalyst for the week is the Nonfarm Payroll (NFP) job report set to report pre-market on Friday.

The market worked its way back to the daily mean at the 21 exponential moving average (EMA) and rallied to the high of the week on Thursday.

If the S&P 500 (/ES) breaks above the trendline near $4,212 to $4,220, look for it to reach the 50-day simple moving average (SMA) and $4300.

Follow the market and target structure. In the video above, we’ll review the price action of the major indexes and volatility and review setups on NVDA, SHOP, and APPL.

Stay Focused!

 

 

The shortened holiday week ahead means less time to take advantage of setups and cheaper premium for options. Now that we are almost through earnings season, we have a regular and volatile week ahead with a few upcoming catalysts.

On Wednesday afternoon, the Federal Reserve will release the Beige Book. For the rest of the week, it’s all about jobs.

On Thursday morning, we’re going to have the ADP Employment report. On Friday morning before the bell, we have the Nonfarm Payroll (NFP) report released. These are both two catalysts to keep an eye on this week.

In the video above, we’ll cover the major indices after a strong close on Friday and review setups on our watchlist.

 

 

Here is our focused list:

NVDA — If NVDA pulls back to the daily mean and finds support, it could break through $189 to the $195 to $200 range. If it breaks below the daily mean, there might be chop or selling pressure to $170.

SHOP — This has been a weak name that hasn’t reverted to the daily mean often. See if SHOP could work its way back toward its 21 exponential moving average (EMA) and revert to the mean to $400. After this, we could see a push to $450 and $470. Until SHOP is back above $413, it is in a vulnerable range. To the downside, we could see SHOP rollover to the $300 range.

Stay Focused!

 

 

The market will be closed on Monday, May 30th, for Memorial day weekend. We hope you can spend time with family and friends and take a well-deserved break from the market.

The S&P 500 closed above the daily 21 exponential moving average (EMA) on Friday for the first time since March. However, this doesn’t change the bigger picture that the path of least resistance seems to be to the downside. 

That being said, we’ll look for bounces to be our next short opportunity.

In the video above, we’ll lay out how to play these ebbs and flows with short positions and review our SPY call debit spread.

Stay Focused!