The week may have started strong and ended strong, but the in-between saw some very indecisive action. QQQ and SPY both had large rallies to close Friday above the critical 20day sma (and the 8day ema as well), and may be starting a resolution of the monthly downtrend to the upside. The action was extremely choppy for most of the week, though, including large head fakes on several days, so it will be important to see follow-through higher on Monday. Complicating the technical picture is earnings season, and this week will be packed with huge market-moving reports, so we need to continue to take gains quickly and hit stops fast. Stocks have been moving well around earnings, though, so focusing on more earnings plays makes some sense, whether that’s ramp into the reports or straddles/strangles for the print. 

AMZN closed the week on a positive note. After some back-and-forth action the previous few sessions, AMZN put together a strong run on Friday to close near the high of the week, and the solid finish should help lead to a move above 120 and into the 100day sma (121.90) this coming week. The Nov04 call spread is in a good spot heading into Monday, so we will be watching for early continuation to start locking in some money on the ramp into the report play.

UPS will be a big report on Tuesday morning, and FDX will likely move off of the numbers. FDX dragged UPS lower when it released earnings in September, and both stocks have been stuck in a lower range since then. FDX came close to breaking out above 160 on Tuesday, only to roll back down into the low-150s the following day, so we will need to pay close attention to the stock tomorrow. With the technical stop for the Nov18 call spread underneath at 148, it may make sense to open a low debit, short-term put spread hedge in the event UPS disappoints. We will see what option pricing looks like and make a decision before the close tomorrow.