Hi all,

This week we continued to see a rotation of capital from the once-hot tech sector to the small-cap stocks. This was based on the CPI data showing a -0.1% drop versus an expected 0.1% gain reported over a week ago. 

Based on the data this week, the CME fed watch tool is now at a greater than 90% chance of a September rate cut.  Meanwhile, the consumer still seems to be spending as the retail sales numbers reported on Wednesday came out higher than expectations although the part of the higher number could be attributed to inflation. Amazon’s Prime Day also recorded robust sales numbers.

The rotation we are seeing is not unusual and I expect tech will find a bottom and start to consolidate and maybe even move back higher at some point this year. However, in the short term, we may see more downside especially if current levels of support are broken.

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Sectors in Play Last Week

• Real Estate and Financials were the biggest gaining sectors this week.
• Technology and Communication Services were down this week.

Key Levels for this Week

• DOW (40,287) – support 39,900 and resistance 40,300
• QQQ (475) – support 455 and resistance 500
• SPY (549) – support 540 and resistance 560
• IWM (217) – support 210 and resistance 225

What to Watch for this Week

• Monday – nada
• Tuesday – 9:45 S&P flash U.S. services and Manufacturing PMI
• Wednesday – 10:00 New Home Sales
• Thursday –8:30 Jobless claims; GDP; Durable Goods Orders
• Friday – PCE index

Earnings this week

• Monday – VZ pre and SAP, NXPI post
• Tues – SPOT, UPS, KO, GE, GM pre and GOOGL, TSLA, V, TXN post
• Wed – CMG, IBM, NOW, LVS, F post
• Thurs – AAL, RCL, ABBV, AZN pre and SKX, DECK post
• Friday – BMY, MMM pre

Positions and Trades Last Week

The cash % level is high now. Waiting for new opportunities.

• BA – short $260 call position. 
• GDX – sold.
• NVDA – long $120 puts Aug 2
• TNA – long small caps. Sold – took profits.
• TLT – Short Sept $91 puts. 
• XLE – sold.

Tracking for Potential Trades

• ADBE – At support $550 watch for either a bounce or break down to $530.
• COIN – if you think bitcoin is poised to move higher, this is one way to play it as well as the numerous other ETFs that are trading now.
• MSFT – Came down to support at $430 on Friday and bounced. Could move back up next week. Possible to sell puts at $430. $450 will be resistance.
• HACK - $63 could be good support for a long entry.
• NFLX – reported earnings and has pulled back to a strong support area of $630. See where it goes early next week for possible long or short depending on price action.
• NVDA – current $118 level is now an area of possible support - could be a good long entry here or sell puts there if you do not mind being forced into a long position at that level. Will depend on how we start the week.  I am also short so may have to sell puts I own.

 

Note: These are investments I am in or watching however, they may not be suitable for all investors. The author of this email is NOT an investment advisory service, a registered investment advisor, or a broker-dealer. I do NOT undertake to advise clients or recipients of this email on which securities they should buy or sell for themselves. This email is provided for information purposes only and traders should always consult with their licensed financial and tax advisors to determine the suitability of any investment.