Welcome back everyone!
First we will cover recent developments in the last week the move into all my thoughts for the week ahead.
The US economy added 57,000 jobs in June, falling short of the 110,000 forecast. Furthermore, the job growth figures for April and May were revised downward by a total of 74,000 jobs. Even with the slower pace of hiring, the unemployment rate dipped to 4.2%.
Diplomatic negotiations between US-Iran were suspended as fighting resumed. Following an Iranian attack on a vessel in the Strait of Hormuz, US forces launched strikes against Iranian missile, drone, and radar facilities, effectively shattering a ceasefire Memorandum of Understanding signed in mid-June. In response to the US strikes, Iran's Revolutionary Guard Corps launched ballistic missile and drone attacks targeting the Ali Al Salem Air Base in Kuwait and the US Fifth Fleet headquarters in Bahrain. Iran has also threatened to halt all ongoing diplomatic processes and assert sole management of the Strait of Hormuz for the next 30 days.
Let’s now turn to the overall market by taking a deeper look into the indexes.
Indexes
All four indexes are still well into a power trend with the Dow, Nasdaq, and S&P, pushing higher with the current 12 week trend. Tech continues to hold strong as the Nasdaq EMA Difference is well above 4%. The current environment for the market will remain in dip buying at the 10-Week EMAs for bounces back up to new ATH.
SPY
Slight selling this past week which brought the S&P right back to the 10-Week EMA. Once again price bounced directly off this level posing another prime dip buying opportunity. This moving average has been a rinse and repeat setup for three of the last four weeks. Every single one of them would have produced strong moves higher. As long as price continues to close above this level on a weekly timeframe, we will soon see new highs on the S&P.
QQQ
The Nasdaq saw further weakness in the previous week while closing relatively flat. MACD has continued to drop off towards flipping negative. In a way this is a warning sign for potential selling but all that matters is the weekly closing price. This next week will be important to see where we close out. More than likely the only way we get a close below the 10-Week EMA is if the US-Iran conflict escalates. All the data presented in the US is for the most part positive.
Now we will take a look at the highest weighted stocks.
Tesla has sold off into a bearish power trend after showing caution two weeks ago. If you look at the chart then you will see a clear fake-out of upside bringing a selloff from 430 to 380 in a week. Looking at the overall basket we have 5/8 stocks below the 21-Week EMA last week. This is a crystal clear warning that exposure to these stocks needs to be taken off. If price on a weekly timeframe was able to close back above the 21-Week EMA, then adding exposure back on will be validated. The list of stocks with price currently below the 21-Week EMA are NVDA, MSFT, AVGO, META, and TSLA.
Overall buys on AMZN and GOOGL which have started to rally off of support. In a below section these stocks along with a few others will be covered with option contracts to go with them.
Before moving on, here’s a recap chat updates sent intraday for the S&P Futures. Every single day these levels are posted with a chart before the open.
Now we will cover all the stocks from the ones on the radar to the ones currently long.
