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Premium daily stock trading service. In our Stock Trading Alerts, we provide extensive analyses and comments at least 1 time per trading day, usually before the opening bell. The analyses focus on all the key factors essential to determining the medium- and short-term outlook for the S&P 500 futures, spanning over several time frames, credit markets and S&P 500 sectors and ratios. They also capture the key fundamental developments, events and trends in assessing the prospects and health of the S&P 500 moves. This way, you’re kept up-to-date on important developments that far too many investors are apt to miss or underestimate.

Whether you're looking for objective analyses to broaden your horizon / add confidence to trading decisions, or want to get inspired by our trade calls for S&P 500 futures, Stock Trading Alerts are the way to go.

  • Volatility? All Eyes on CPI – Looking Beyond the Data Release

    June 10, 2021, 6:45 AM

    Market participants are all waiting with bated breath ahead of today’s CPI data release. It’s an important one after last month's shocker. So, what’s your plan?

    In general, data releases can be fickle and tricky events. While they may provide opportunities for algorithmic traders due to short-term spats of volatility, it can be challenging to initiate or exit a position as the market digests the data upon release. Longevity in trading can be achieved by being flat around data releases (or at least not highly leveraged); and/or having a what-if plan already in place.

    Today’s CPI data (this publication is being written before the data release) could provide some fireworks. Last month, the expectations were for a 0.2% print, and we got 0.8%. Today, the market is looking for 0.4% for the CPI print (includes food and energy) and 0.5% for Core CPI (excludes food and energy). Could this be on the lofty side? Or, will inflation begin to spiral out of control?

    Keep in mind that we are heading into a Fed Meeting June 15 -16. If prices continue to rise at an exponential rate, will the Fed really be willing to raise interest rates? It would be appropriate by many standards to do so. However, the theme has been “lower for longer”; and this creates a sense of uncertainty as to what the plan may be if we get another huge CPI print. While neither you nor I have a crystal ball available, my inclination is that the print could be below expectations. If that happens, it would fit the Fed’s “transitory inflation” theme that was discussed in the past. We will find out at 8:30 AM ET today.

    As traders wait on this data, the $VIX certainly caught a bump in yesterday’s trading.

    Figure 1 - $VIX Volatility Index March 10, 2021 - June 8, 2021, Daily Candles Source stockcharts.com

    We can see some technically bullish signs in the $VIX above, with some long daily tails on the candles coinciding with the April lows. RSI(14) and MACD(12,26,9) are showing bullish crossover signs. The $VIX can be a bit of a tricky barometer to trade technically.

    Figure 2 - SPY SPDR S&P 500 ETF March 9, 2021 - June 8, 2021, Daily Candles Source stockcharts.com

    The SPY indeed put in a down session yesterday with the $VIX higher. As we have been discussing, the S&P 500 is near the higher end of its range and will most likely need a catalyst to get moving one way or the other.

    The 50-day moving average is $414.58 right now, which is only 1.676% away from the current price. A move down to the 50-day moving average could be of interest.

    In addition, we can see the Fibonacci retracement levels of interest in the SPY from the May 19th low to the June 8th highs. We see the 50% retracement level @ $414.38 and the 61.8% retracement level at $412.26. I like how the 50% retracement level lines up with the 50-day moving average here.

    Figure 3 - SPY SPDR S&P 500 ETF March 9, 2021 - June 8, 2021, Daily Candles Source stockcharts.com

    Next, no one knows with any degree of certainty how the equity markets will react to the CPI print, whether it exceeds or misses expectations. Here is what we do know: the last data release brought the cash S&P 500 near the 50-day moving average, which held up well. It then tested the 50-day moving average four trading sessions later, and it once again held up very well. Could the same type of price action be in store this time?

    Nobody knows. However, I am inclined to look for a move for a potential pullback opportunity, between $412.26 (61.8% Fibonacci retracement level above) and the 50-day moving average ($414.58 as of the close on June 8th). If the market moves higher off the CPI data, so be it. The market will be there tomorrow. Remember to monitor the 50-day moving average level, as it changes each day!

    Now, for our premium subscribers, let's recap the eight markets that we are currently covering. Not a Premium subscriber yet? Go Premium and receive my Stock Trading Alerts that include the full analysis and key price levels.

    Thank you for reading today’s free analysis. If you would like to receive daily premium follow-ups, I encourage you to sign up for my Stock Trading Alerts to also benefit from the trading action described - the moment it happens. The full analysis includes more details about current positions and levels to watch before deciding to open any new ones or where to close existing ones.

    Thank you.

    Rafael Zorabedian
    Stock Trading Strategist

  • Timber! What Do Insane 2021 Lumber Prices Mean for You?

    June 9, 2021, 9:21 AM

    As many commodities have continued to climb impressively, one stands out like a sore thumb to me: lumber. What can the price of lumber mean, or more importantly, do for you?

    Before diving into the lumber market, let’s review the current state of the S&P 500.

    There weren’t too many surprises in the S&P 500 in Tuesday's cash session, as the $SPX settled practically flat on the day. $SPX is at the higher end of its recent range, as discussed in yesterday’s publication. It will most likely require a catalyst of some sort to push through higher or break lower from here. Will Thursday’s CPI data be the catalyst? I think it could be.

    After last month’s monster CPI print, traders are on their tippy-toes waiting for this data release. It is important to know that the $SPX was already down for two consecutive sessions when last month’s CPI print came out. It then sold off further intraday (May 12) and closed sharply lower.

    Figure 1 - $SPX S&P 500 Index April 28, 2021 - June 8, 2021, Hourly Candles Source tradingview.com

    It seems like everyone is talking about inflation, and with good reason! It is real and is impacting lives. All eyes are peeled for Thursday's CPI data release.

    Speaking of inflation, have you noticed the price of lumber lately? We all know that commodities are much higher and that homes are priced ridiculously high across most of the US. What amazes me is the demand and ability for borrowing at such high prices...but that is a subject for another time.

    Check out this long-term chart of Lumber Futures (front-month):

    Figure 2 - LBS1! Random Length Lumber Futures Continuous Contract December 1972 - June 2021 Monthly Candles Source tradingview.com

    That’s a 48-Year chart for lumber, folks. Again, that is a chart for lumber. There is no Bitcoin or Dogecoin inside the lumber. There isn't any 24K gold hiding in there. It is wood, and it managed to go ~ 8X from the pandemic lows.

    This monster clearly decided that the average prices over nearly half a century just didn’t apply anymore. What a move!

    I want to put this in big bold letters here: I strongly suggest against trading in Lumber Futures. They can be illiquid, and experience many limit up and limit down days. You could be stuck in a losing position and not be able to get out. The only traders in Lumber futures should be hedgers that are in the wood business or deep pocket institutional traders that have real money to burn. Futures trading entails unlimited risk. I am sure that many fortunes have been made, and many more have been lost during this insane lumber market. Being on the wrong side of a futures market like that can be brutal.

    Now that we have that out of the way, is there another way to participate in this market?

    Yes, there is. But first, have you been following along with the GRID ETF trade that was covered in the May 6, 2021 publication? We were targeting an idea buy range of $86.91 - $88.17.

    Figure 3 - First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (GRID) Daily Candles January 7, 2021 - June 8, 2021. Source tradingview.com

    Given the infrastructure bill theme that is currently in play in the US, the $100 Billion aimed at upgrading and building out the nation's electrical grid, and the fact that the new administration is still in its very early days, I don’t think it is too late to get aboard. I like pullbacks, and we will be covering them.

    Now, for our premium subscribers, let's explore a potential opportunity in the lumber sector. Not a Premium subscriber yet? Go Premium and receive my Stock Trading Alerts that include the full analysis and key price levels. For a limited time, there is a 14-day trial available for only $9!

    Thank you for reading today’s free analysis. If you would like to receive daily premium follow-ups, I encourage you to sign up for my Stock Trading Alerts to also benefit from the trading action described - the moment it happens. The full analysis includes more details about current positions and levels to watch before deciding to open any new ones or where to close existing ones.

    Thank you.

    Rafael Zorabedian
    Stock Trading Strategist

  • Patience! Small Cap Value Could Be Opportune on Pullbacks

    June 8, 2021, 9:54 AM

    If you have been following along, you know about the Russell 2000 Reconstitution. Is there a way to make it work for you with a value theme?


    Before we dig into opportunities on pullbacks, here’s a brief reminder about yesterday’s recap of the various ETFs we’re following and the good calls we’ve had on them.


    Buying on Pullbacks

    As this US equity bull market marches on, it is a good practice to keep a pulse on the broader indices in the short-term, to take a current measure of a market. While reviewing many different ETFs, it is apparent that many of the charts look the same at this moment.

    If buying, I prefer to buy on pullbacks. Who doesn’t? Many traders like to trade on momentum, and that is also a proper strategy. For me, it is the pullbacks in a bull market that seem to have the most favorable risk/reward propositions, so taking a measure of the broader indices regularly can be beneficial.

    Figure 1 - $SPX S&P 500 Index January 22, 2021 - June 7, 2021 Daily Candles Source stockcharts.com

    As we can see, the $SPX is near the top end of its short-term range, with the key levels to know being 4232.60 being its all-time closing high (so far) on May 7. 2021.

    Given the current macroeconomic theme, including higher inflation, a weaker dollar overall, government spending, corporate labor expense reductions (think working at home), and more, I do expect the overall market to continue its march higher. However, when we are in a range, I don’t find much benefit to getting long near the very top end of a range for several reasons.

    1. What if the top of the range holds? Then, I could have used more patience , and gotten a better entry level.
    2. What if the market breaks out of the top of the range and then fails? Patience would have been good here too.
    3. What if the market breaks out of the top of the range and continues marching higher?! Then we may have missed a short-term opportunity. However, markets like to come back and test the old highs of ranges. This allows more time to discover more information and to potentially get even better entry points. Patience can go a long way.

    So, at this moment, I would be looking at the 50-day moving average. Keep that on your radar, folks! It has been an excellent indicator in the S&P 500 on many attempts. You can read more about this in the May 12th publication.

    Figure 2 - $SPX S&P 500 Index June 18, 2020 - June 7, 2021 Daily Candles Source stockcharts.com

    Given that we are at the top of the recent range, I like to analyze some what-if scenarios. What if we do get a pullback? That would be the best scenario, in my opinion. If and when a pullback occurs, there may be several trades already in place. That can be working well for a trader to ride out a garden variety pullback while making a shopping list for new opportunities. So, what if we get a pullback, to say the 50-day moving average?

    The small-cap value space has been a solid place to be in 2021. The ETFs in this space focus on smaller market capitalization stocks that seek value instead of growth. While "small cap value" may sound counterintuitive, there have been some ETFs with exceptional performance in this area during 2021.

    With patience being the key theme today, where could we focus attention, if and when we get a meaningful pullback? Today, for our premium subscribers, we dig into an ETF in the space that has delivered a YTD return exceeding 45% as of the time of this writing.

    Not a Premium subscriber yet? Go Premium and receive my Stock Trading Alerts that include the full analysis and key price levels.

    Thank you for reading today’s free analysis. If you would like to receive daily premium follow-ups, I encourage you to sign up for my Stock Trading Alerts to also benefit from the trading action described - the moment it happens. The full analysis includes more details about current positions and levels to watch before deciding to open any new ones or where to close existing ones.

    Thank you.

    Rafael Zorabedian
    Stock Trading Strategist

  • NFP Numbers Miss, Yet Equities Higher, and What We Got Right About ETFs

    June 7, 2021, 8:30 AM

    As the NFP jobs number missed expectations of 645K-665K, with a print of only 559K, the equity indices jumped higher. What gives?

    This lower print could be a prelude to the next Fed meeting, which happens on June 15-16. Weak job growth could give the Federal Reserve a reason to continue with the "lower for longer" theme and more dovish signals. The Ten-Year note yield moved lower on Friday off the jobs data, while the Nasdaq surged. Tech has been moving inversely to bond yields at a decent correlation in recent months and could be a sign of things to come.

    Figure 1 - $TNX 10-Year Note Yield (candlesticks) compared to $NDX Nasdaq 100 Index (sold red line) -March 23, 2021, - June 4, 2021, Source tradingview.com

    Above, we can see the mostly negative correlation between the $TNX 10-Year Note yield (candlesticks) and the $NDX Nasdaq 100 Index (red line).

    The Nasdaq 100 led all indices on Friday, tacking on 1.78%, while the 10-Year Note yield lost 4.00%, to settle at 1.561%. There is a Fed meeting approaching, and with the other major indices settling close to all-time highs on Friday, a breakout to the upside in the major indices could lead to lower yields. Will the weak jobs number be the Fed’s fundamental catalyst to more dovish inclinations?

    The possibility exists.

    Review of Our Latest ETF Picks

    Now that the big jobs number is out of the way, and since we have covered so much during the month of May and into early June, I thought it would be an opportune time to recap some of the existing markets that we are following in greater depth. Let’s jump right in:

    1. (GRID) First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund. GRID analysis was first introduced in the May 6. 2021 publication with an idea buy level between $86.91 and $88.17.

    The idea level was traded through between May 11 - May 13. GRID settled on Friday, June 4, at $91.64.

    Figure 2 - First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (GRID) Daily Candles May 6, 2021 - June 4, 2021. Source stockcharts.com

    Shorter-term traders could have used the old 52-week high as an exit ($90.96) as mentioned in the May 6. 2021 publication. However, I continue to like this name given the infrastructure bill and will keep readers apprised of daily overbought technical levels and other ideas for exits in upcoming publications.

    2. (ERTH) Invesco MSCI Sustainable Future ETF. ERTH analysis was first introduced in the May 10. 2021 publication with an idea buy level between the 200-day moving average and a key 61.8% retracement level. On May 10th, these levels were $67.76 - $68.49.

    Figure 3 - Invesco MSCI Sustainable Future ETF (ERTH) Daily Candles May 10, 2021 - June 4, 2021 Source stockcharts.com

    ERTH traded to its 200-day moving average on May 13, 2021; albeit briefly (see above). ERTH settled on Friday, June 4, at $74.81.

    3. In the May 11, 2021 publication, we explored the 10-Year note yield. On that day, the June contract (ZNM2021) was the front-month and active contract. Since then, the contract roll has occurred, and September is now the active contract. The outlook on May 11, was for potentially higher yields, and lower prices. The idea zone to sell the June 10-year notes (ZNM2021) was 132'22 - 132'24'5 with a tight stop in the May 11th publication. We also revisited the idea on May 20th.

    Figure 4 - June 10-Year notes May 11, 2021 - June 7, 2021, 12:40 AM ET Daily Candles Source tradingview.com

    10-year notes had remained largely rangebound until Friday’s NFP jobs number and then moved higher off the data. Given the upcoming Fed meeting on June 15-16, and the move higher in the 10 Year note futures (lower $TNX yields) on Friday, my inclination is to be out of the 10-year notes at this time. Should equities move higher and rates lower, it would not be wise to be short the 10-year notes. Time will tell, but for me, I think there are other better places to be right now.

    4. On May 25th, we discussed automation, artificial intelligence, and QTUM - Defiance Quantum ETF with a long entry idea between $44.00 - $47.25 (50-day moving average). It traded in this zone on May 25th, with a low of $47.05 and the next day (May 26th) made an intraday low of $47.21. QTUM closed on Friday, June 4, at $49.00.

    Figure 5 - QTUM Defiance Quantum ETF Daily Candles May 25, 2021 - June 4, 2021. Source stockcharts.com

    5. In our May 27th publication, we examined the Russell Index reconstitution. It is a very curious yearly phenomenon that results in a newly balanced index on June 28th, 2021. We focused on the Russell 2000 Index via the IWM. IWM closed at $225.65 on May 27th and settled at $227.40 on Friday, June 4th.

    Let’s also keep in mind that we have CPI data coming out this Thursday, June 10, at 8:30 AM ET.

    (The full version of today’s analysis includes 5 buy opinions, 1 sell opinion, and 1 hold opinion)

    Thank you for reading today’s free analysis. If you would like to receive daily premium follow-ups, I encourage you to sign up for my Stock Trading Alerts to also benefit from the trading action described - the moment it happens. The full analysis includes more details about current positions and levels to watch before deciding to open any new ones or where to close existing ones.

    In particular, I encourage you to do so right now, as we just launched a promotion that allows you to subscribe for just $9 for the first TWO weeks! Subscribe at this preferred rate today.

    Thank you.

    Rafael Zorabedian
    Stock Trading Strategist

  • Non-Farm Payrolls in Focus – Watch Out for Expected Price Volatility

    June 4, 2021, 6:26 AM

    Available to premium subscribers only.

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