Carlos discussed on the posted video earlier this morning, the $SPX levels and where we could be heading today.
So far it has played exactly how we predicted, we are in processes of completing wave 3 and then a pullback is required to complete the 1-5 wave move (for those who follow EW method) before making any bullish counts, so far its just a corrective bounce, and currently we closed back in the wedge, as we couldn’t close above 50MA. On the same token in the chat room Warren in our Futures room has placed a short trade on the $ES_F and possible target 2639, trades were posted via shorting $ES_F or playing the $SPY put trades.
Now we looking at the $QQQs on the other hand have been holding pretty solid up move, and making some good new highs on the intraday basis. They are better set for any bullish play, and we can thank our leaders for that up move in the Nasdaq, Leaders like $AMZN, $FB, $AAPL, $NVDA etc.
Assumption on $QQQ if wave C hold, we can project to 166.93 as a target with having 163.99 as the support, due to the seasonality for a strong up move to even 171.
$FB long trade almost getting ready for another long play once we clear that 174 support holds and go higher to 186 target.
$AMZN, has been holding very good after reporting its ER, and we can potentially look for 1721 target, or perhaps 1678 to be on the conservative side 6% return on the investment.
$ANET reported earnings and its one of the market leaders, and we think it has a nice move up, holding the current level and as it complete the 5 wave up, we could see 1108% win rate if we take the Delta 40 long calls after its reporting its earning. We will place this trade in the room.
$CPA also reporting this week, one of our favorite companies. Its currently working the 5 up and it will likely completed over here, and ready for an up move, so we will place based on the lows and target of 123-126 possible upside targets – always better to wait after earning..
One of the Major movers for the $QQQ’s, $NVDA is going to report this week, and we predict that it can get sold after it reports, as the patter of the Elliot Wave already set for a drop, as a standard move. After the initial down reaction, we could project it makes a new high after with potential targets roughly around 260 to 280+, in Summary don’t short it, wait for the entry around 227, if we don’t get it that’s basically our long targets.
Last week we did $BABA and we projected 190 as a price target, and we bought the 190 calls and currently it’s trading 197.
$TNA is currently getting closer to our target and we have been lightening up since Friday, as at the moment ROI on capital invested is not warranting holding more, although we can extend to 73-75 as potential target – we would like to see a pull back to 70 before joining the long again. With return of 3-4%.
$AAPL, has been a leader and its getting closer to the 1Trillion dollar company, right now its pretty much extended
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At the moment, it not guaranteed if markets can go higher next week. This time we don’t have a secure pattern. Cyclical analysis is calling for higher into April 30th and Open Interest is projecting higher into the end of this week, May 4th. I like the way daily stochastics are positioned, they will provide strength in case markets decide to follow the open interest projections to the upside.
EW Analysis:
On Tuesday April 24th, based on the .618 extension that was being hit on SPX as shown in the following chart
We, across the board, warned that the excessive confidence of the bears would have to be examined and on Wednesday again, we, in the general Chat Room, warned that markets were to face the 3rd of the 3rd off the 2611.2 lows. So while we maintain that the $SPX should see the 2468 level and potentially lower we have taken an unbiased attitude looking for any evidence that shows our case for lower is wrong, evidence that allows us to capitalize on any potential truncation.
We continue monitoring $AMZN which ideally should hold 1551/1542 in order to continue advancing toward 1721/1770 area. We continue advising you that $AMZN is a must hold company, I have said this to you many times and I expect to be right again while 1540 area holds and retakes highs of this week.
Current $SPX:
The case for higher on $SPX only can be constructed this way shown in the following chart:
another ABC that should take the market higher to 2775 and 2757, the resistance at 2714 is relatively important so reversal from this area should be watched in order to confirm any impulse to the downside.
Immediate pattern has support at 2742 and 2666.1; I will add more if we see one of these levels, at the moment we need more price action with base calling for 2468 but needing a move to 2757 in a C wave up.
QQQ, three up off the lows, needing to hold 160.63 and print one more high in order to confirm five up off the lows that allow us to buy a potential retrace in wave 2.
Enjoy rest of the week and do not forget to not overreact, stay patient and focused.
Real Estate Investment Trust (REIT): REITs invest in real estate or loans secured by real estate and issue shares in such investments. A REIT is similar to a closed-end mutual fund.
Junk bond: Bond with a speculative credit rating of BB (S&P) or Ba (Moody’s) or lower. Junk or high-yield bonds offer investors higher yields than bonds of financially sound companies. Two agencies, Standard & Poors and Moody’s Investor Services, provide the rating systems for companies’ credit
Quick ratio: Indicator of a company’s financial strength (or weakness). Calculated by taking current assets lessinventories, divided by current liabilities. This ratio provides information regarding the firm’s liquidity and ability to meet its obligations.
Short squeeze: When a lack of supply tends to force prices upward. In particular, when prices of a stock orcommodityfutures contracts start to move up sharply and many traders with short positions are forced to buystocks or commodities in order to cover their positions and prevent (limit) losses. This sudden surge of buying leads to even higher prices, further aggravating the losses of short sellers who have not covered their positions.
Target Leverage Ratio: The ratio of the market value of debt to the total market value of the firm that management seeks to maintain.
Upsize option: An option in IPO to increase the size of offering when the demand is high.
Velocity of Money: Rate at which money is exchanged from one transaction to another. It also refers to how much a unit of currency is used in a given period of time. The rate at which people spend money. The velocity of money is usually measured as a ratio of gross national product (GNP) to a country’s total supply of money.
A high federal funds rate discourages banks from borrowing from one another, which tightens the money supply. Raising the federal funds rate is one of the most common measures taken by the government to combat high inflation.
Inflation risk: Also called purchasing power risk, the risk that changes in the real return the investor will realize after adjusting for inflation will be negative.
Federal Open Market Committee (FOMC): The body that is responsible for setting the interest rates and credit policies of the Federal Reserve System.
Stagflation: Period of slow economic growth and high unemployment with rising prices (inflation).
Trend Ratio Analysis: The comparison of the successive values of each ratio for a single firm over a number of years.
Bull spread: Spread strategy used in options and futures trading that is designed to capitalize on expected price appreciation. A bull spread using call options is created by buying a call option on an asset with a certain strike price and selling a call option on the same asset with a higher strike price (same expiration date). A bull spread with put options is created by buying a put option with a low strike and selling a put option with a high strike price (same expiration date). Less frequently, the bull spread is implemented by buying the nearby futures contract and selling the next out contract.
Bear spread: Strategy in the options or futures markets designed to take advantage of a fall in the price of a security or commodity. A bear spread with call options is created by buying a call option with a certain strike price and selling a call option on the same stock with a lower strike price (with the same expiration date). A bear spread with put options is where an investor buys a put with a high strike price and sells a put with a low strike price. With futures, the investor sells the nearby contract and purchases the next out contract. All of these strategies are designed to profit from a fall in the underlying asset’s price.
Butterfly Spread: Strategy that involves buying a call option with a relatively low strike price; buying a call option with a relatively high strike price; and selling two call options with an intermediate strike price. Essentially, this is a bear call spread stacked on top of a bull call spread. One can also do this with puts. The investor buys a put with a low strike, buys a put at high strike and sells two puts at intermediate strike price. The payoff diagram resembles the shape of a butterfly.
Narrowing the spread: Reducing the difference between the bid and ask prices of a security
Narrow market: An inactive market, which displays large fluctuations in prices due to a low volume of trading.
Odd lot: A trading order for less than 100 shares of stock.
Round lot: Trading order typically of 100 shares of a stock or some multiple of 100.
Odd-lot theory: Theory that profits can be made by making trades contrary to odd-lot trading patterns, since odd-lot investors have poor timing.
Odd-Lot Buy Back: An offer made by the corporation or its agent to purchase shares from odd-lot shareholders
Odd-lot dealer: A broker who combines odd lots of securities from multiple buy or sell orders into round lots and executestransactions in those round lots.
Odd-lot short-sale ratio: The percentage of total odd-lot sales that is composed of short sales.
Odd-Lot Resale: An offer made by the corporation or its agent to purchase shares from odd-lot shareholders and immediately resell them in the market, usually in round-lots to institutions, thus saving the corporation the expense of merely buying shares back.
