Hi all,

On Friday we got the results from the PCE price index which is the Fed-favored inflation watch gauge. It fell to a level of 2.5% annually in June which was right in line with street expectations.

Personal income growth slowed to 0.2% month-over-month, falling short of the anticipated 0.4%.  This unexpected fall in personal income and spending indicated demand is weakening for goods and services, bolstering the argument for a fed rate cut. Interestingly, many of the luxury brands like LVMH have also reported seeing weak demand even with the high-income bracket consumer.

Based on the data this week, the CME fed watch tool is now sitting at almost a 100% chance of a September rate cut.  

The rotation into small caps we have been seeing over the last few weeks continued. There are quite a few tech sector stocks that will be reporting earnings this coming week. We will see if they can impress more than GOOGL and TSLA did this past week. It is likely going to be a volatile week with all the pending news.

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Sectors in Play Last Week

• Utilities and Healthcare were the biggest gaining sectors this week.
• Technology and Communication Services were down this week again.

Key Levels for this Week

• DOW (40,589) – support 39,800 and resistance 40,800
• QQQ (462) – support 455 and resistance 480
• SPY (544) – support 535 and Resistance 555
• IWM (224) – support 215 and resistance 225

What to Watch for this Week

• Monday – nada
• Tuesday – 9:00 Home price index; 10:00 Consumer confidence and Job Openings
• Wednesday – 8:15 ADP Employment; 9:45 Chicago PMI; 10:00 Pending Home Sales; 2:00 Fed Rate Decision; 2:30 Powell Speaks
• Thursday –8:30 Jobless claims; 9:45 manufacturing PMI; 10:00 ISM Manufacturing
• Friday – 8:30 Employment Reports; 10:00 Factory Order

Earnings this week

• Monday – MCD, ON pre, and TLRY post
• Tues – SOFI, PYPL, PFE pre and MSFT, AMD, SBUX post
• Wed – MA, TMUS, BA pre and META, QCOM, ARM, CVNA post
• Thurs – TM, MRNA pre and AAPL (4:30), AMZN, INTC, COIN, DKNG, ROKU post
• Friday – XOM, CVX pre

Positions and Trades Last Week

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

• BA – short $260 call position. 
• CRWD – short $240 puts – expired worthless
• NVDA – long $120 puts Aug 2 – sold for a loss.
• TNA – long small caps.
• TLT – Short Sept $91 puts. 

Tracking for Potential Trades

• ADBE – The $530 level looks possible for a bottom now.
• CRWD – another opportunity this week to sell puts and possibly upside calls if the stock remains range-bound.
• GOOGL – put in a bottom after earnings of around $164.
• INTC – popped on some news but short-lived and now back to support around $30
• NFLX – has continued to pull back to a support area of $625. See where it goes early next week – it is sitting at the neckline of a head and shoulders pattern.

 

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 and 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.