Is the SPX going over 2500?
Or under 2400?
Tech may be the deciding factor, as I discussed on CNBC’s Fast Money yesterday:
Earning season kicks off Friday with numbers from JP Morgan (JPM) and Wells Fargo (WFC), but tech may really be the deciding factor.
So let’s through 6 key charts so you can understand where the market may be going:
The S&P held critical upper support outlined at 2400 while tech was in a correction phase.
Recently, both have bounced.
The question now is can the reaction to big cap tech earnings push SPX through 2453 on its way to 2500+?
And I say “the reaction” for a reason. The numbers themselves aren’t as important as how the market treats them.
The QQQ’s put a top in on June 9 and since pulled back 5.6% to $135.80 before getting a little bounce.
There’s a battle of 2 patterns here — the double bottom at $135.80 vs. the head & shoulders top that has a measured move towards $132.
The key spot that determines the move could be the 50 day at $139ish — does it get reclaimed or rejected?
A streaming video giant may hold the answer:
NFLX reports on Monday, July 17, making it the first big tech name to deliver results.
It’s a barometer for what kind of news the street wants to buy or sell.
If they buy NFLX strength on a good report, that could mean positive vibes for the broader market.
If strength gets sold, it could mean no F.O.M.O. (fear of missing out), which could put a lid on tech.
And if it’s in-line or misses, does the street give it a pass?
All-time high resistance is $167.
Key support is $139.
Watch these levels if you’re looking to play reactions.
AMZN recently corrected along with the rest of tech, but repaired its chart quickly ahead of Prime Day.
Prime Day looks like a home run with all the shopping activity, and I hope you picked up an Echo for $99! I paid $180 for mine!
For now, they’re buying the news and the stock’s up a quick 8 points.
Earnings are on July 27, which is a very big week for tech earnings with GOOGL & FB.
See if it holds the 50 day around $975.
On June 9, AAPL broke its momentum trend, and it has a head & shoulders type look ahead of earnings on August 1.
The neckline is around $142 and serves as major support. it’s important to hold that level.
How AAPL responds to its report could set the tone for early August.
If it’s weak, do traders give it a pass?
The iPhone timing could be more critical than the report itself.
Traders would really like to see it out in September or early October.
There’s also a lot of speculation over pricing and features like wireless charging and a fingerprint reader, so there’s a chance the stock doesn’t do much on earnings as traders await product details.
NVDA is what traders use from day-to-day to help judge the action in technology.
Earnings aren’t until August 10, where it could take the leadership baton from AAPL (either up or down).
It’s above the 8 & 21 & 50 day moving averages and showing signs of technical strength.
Last quarter, it gapped up big and never looked back, and autonomous cars and blockchain exposure are getting the stock a lot of attention.
It seems like traders go gaga every time they hear the words ‘Bitcoin’ and ‘Nvidia’ together.
Traders really like it when technology leads the market.
And I can’t say this enough:, the reactions to the reports is what matters — not the numbers themselves.
So carefully watch to see how traders treat NFLX, and then AMZN, AAPL, and NVDA.
The price action will tell us everything we need to know.
If you want to see how I’ll be playing them, take a look at Redler All-Access.