Index #ES_F #SPY & #AAPL #FB Bias Update and Levels for Thursday, July 30, 2015
So far the theme this earnings (ER) season has been rally of good ERs like NFLX GOOGL AMZN GPRO and then fade in the
next few trading sessions or if at/near ATHs with high expectations pre-ERs
stocks like AAPL and FB stall and/or
drop if not blowout ERs.
Putting ERs aside or when ERs are unable to lead the S&P500, SPY, ES-emini index to
new ATHs on heavy volume and when Fed events like FOMC this week become the
only reason indexes catch a bid and do so on extremely low volume can only mean
one thing which is a “topping process” or at least that is how it was pre-QE3. What most people, traders, and investors don’t know is if even when continuing
higher new ATHs on very low volume is still a topping process; it’s all about
volume to confirm the strength of breakouts and breakdowns.
Without a new catalyst such as ERs bringing in new buyers on
heavy volume and when indexes only bid on Fed hope US equities will not be able to
push much higher without some sort of meaningful pull-back or correction.
Unfortunately my personal belief is QE3 has destroyed the honesty of historical
stock market patterns which also unfortunately means the current mindset of the US
stock market is BTD will never fail, but just like when no one believed the
housing real estate market in 2004-2008 would ever stop reality always catches
up and when the time comes the drop in US stocks will likely be a lot more
than just a pull-back or correction.
I see the tweets throughout ever trading session and I can tell
most people, traders, and investors believe stocks will never crash again; same
mindset of most Americans just before the housing bubble burst in 2008 and also just
before the dot.com bubble burst in 1999/2000 as well. I lived, traded, and
bought/sold real estate in both the dot.com and housing bubble and I can a sure
you this time is no different and is just a normal 7 to 8 year cycle. I will be
willing to bet all the guest who go on CNBC and say “this time is different”
will be the same guest who say “all signs where there for stocks to crash”
which they will do so after the fact.
For now and as I tweeted yesterday (@mocktrade) the only index
that breached the lower high threshold was
ESU5, and until all others follow the lower higher formation in the indexes
and almost all names who have reported ERs should continue as follows:
IWM while
below 122.40-122.90 zone 118s remain
a potential target.
ESU5 will
have to first get and hold below 2080
to head towards 2050s otherwise 2108s-2112s zone more likely.
NQU5 until
above 4582s-4585s zone there is
potential for lower.
AAPL while below
125s a first potential targets
remain at 121.80-121.55 zone then at 117s.
FB while
below 97.60 and especially while below
96.75 the lower targets are at 90.40 then 88s.
AMZN must get
back above 549/550 to avoid lower.
NFLX must get back above 110.55 to avoid lower.
GPRO must get back above 63.25 to avoid lower.
Ethan Premock
Futures & Options Strategist
Hamzei Analytics, LLC
Hamzei Analytics, LLC
