Tyler's Options Trading Market Analysis the Week of 7/24/23

Our forecast last week happened right in front of us! Earnings from $TSLA and $NFLX kicked off the earning season with “a sell the news event,” and it just got started. We closed another week with blow-out profits on $RXRX, $MS, $AMZN, $WAL, $NFLX, $ZION, $NVDA and just 1 loss on $AAPL. We also locked in profit on our monthly spread with $ARKK. Currently, we have monthly $IONQ and $RXRX and weekly spread $NVDA.

One key move last week is worth paying attention to is that the Dow broke out of trading range and closed above its 78.6% fib. for the 1st time and was off just about 4.3% from its January 2022 record high. Are investors finally pivoting to industrials since their valuations are still fair? It seems like it. Meanwhile, the tech-weighted Nasdaq closed in red at 78.6% fib. And the S&P500 closed right at that level as well. As we have seen, the Nasdaq has been leading the way this year until now that it makes a slight turnaround. Is this a signal for pullback on the techs as investors may be taking profit at this time? We shall see this week with the Fed rate decision and Wednesday and earnings from key companies $MSFT, $GOOG, $META, $BA.

If we don’t have a bounce from this level of the $SPY and $QQQ, we may see a pullback to $445-$440 on the $SPY and $365-$360 on the $QQQ. If they’ll bounce from here, then we may see a retest of last week high. Useful signs to look for a pullback will be decelerating market pricing and then reversing coupled with trading volume picking up as stocks slide.

This week’s notable economic events include: On Tuesday, S&P CoreLogic will release its Case-Shiller National Home Price Index for May, and the Conference Board will release its Consumer Confidence Index for July. On Wednesday, the FOMC will announce its monetary policy decision, with remarks by chairman Jerome Powell. Futures markets are pricing in a 0.25% increase in the federal-funds rate, to 5.25% to 5.50%. On Thursday, the Bureau of Economic Analysis will release its advance estimate for second-quarter gross domestic product growth. On Friday, the BEA will report the core PCE price index for June, the Fed’s preferred measure of inflation.

It will be a busy week so we should expect a lot of volatility. Thus, we will focus on short-term trading with possible day trades and overnight lottos until Wednesday afternoon, then set our trades for August after gaging market sentiment after the FOMC rate decision and big tech earnings this week. With that, let’s close the last week of July strong with a few more good trades. Namaste!

Tyler is the Head Options Moderator at Turbo Trading. The Flash Option Program is aimed at busy traders who do not have much time to manage their positions. In just a few minutes a week, a subscriber can choose a suitable position from among the Flash Option trading ideas for that week and set it up. The Flash Option Program represents a winning, consistent strategy with high-probability option trades.

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