02.13.2023 | Weekly Market Newsletter | Vol. 2 Issue 7
02.13.2023 | Weekly Market Newsletter | Vol. 2 Issue 7
Market Trader's Weekly Newsletter brings potential swing setups with a time horizon from days to months depending on price action. The following research is based on Fundamentals & Technical Analysis.
What is included in this week's edition?
WEEKLY REVIEW & LOOKING AHEAD - An overview of current market standing, fundamental matters with implications upon the market, and general sentiment regarding the major US indices. Key takeaways to be mindful of as we look forward to the upcoming trading week.
FUTURES MARKETS - A technical review of the major indices and futures that represent the overall health of the market.
STOCKS/OPTIONS - Trends, key levels, and trade targets are identified for individual names presenting potential opportunities in the market.
Weekly Review
Monday: The market opened down due to increased geopolitical tensions and caution ahead of Fed Chair Powell's speech. The indices spent much of the day moving sideways in a tight range. No significant US economic data was released.
Tuesday: The market started mixed, but shot up initially after Powell's speech. However, Powell's comments on potential rate hikes led to selling pressure and a reversal in the main indices. Late Tuesday saw a technical rebound and a rise in AI-related stocks due to Microsoft's announcement.
Wednesday: The market was in retreat mode due to concerns of market overextension and consolidation. Alphabet stock fell 7.4% due to concerns about its AI capabilities. President Biden's State of the Union address raised concerns about tax policies and increased regulation.
Thursday: The market started bullish but soon retreated and spent the day retracing. The selling was broad-based and orderly, with the S&P 500 closing below 4,100. A favorable response to Walt Disney's earnings report was offset by a decline in technology stocks.
Friday: The market was slow, with a lack of conviction from buyers and sellers leading to modest gains in the S&P 500 and Dow and a modest loss in the Nasdaq. Tesla was a standout loser among mega-cap stocks amid concerns over a potential order from the Department of Transportation. The energy sector was the only one of the 11 S&P 500 sectors to log a gain, while the communication services sector registered the largest decline. The University of Michigan Consumer Sentiment report showed an increase in the year-ahead inflation expectation, raising concerns over consumers' future discretionary spending capacity. The Treasury Budget for January showed a deficit of $38.8 billion. The 2-year Treasury note yield and 10-year Treasury note yield both rose this week, reflecting concerns that the Fed may raise rates. The fed funds futures market is now pricing in a 78% probability of a rate increase in May.
Weekly Performance Heatmap
Overall Market Heatmap
Sector Performance
Looking Ahead
Next week, the market can expect a release of inflation data, including January's Consumer Price Index and Producer Price Index, which are expected to slightly increase from the previous month. The U.K. will also release its January Consumer Price Index, while the Eurozone and Japan will report fourth-quarter GDP readings. Several Fed officials are also slated to speak throughout the week, including St Louis Fed President James Bullard, Cleveland Fed President Loretta Mester, and Richmond Fed President Tom Barkin. Fourth-quarter earnings season continues, with multiple companies posting earnings (see earnings calendar below).
Earnings Calendar
Economical Events
Future & Commodities Markets
/ES - Emini S&P 500
This past week, as suggested in the levels provided (see below) the targets of both the upside and downside were hit. The market opened right under the 4150 and then following Powell’s speech rallied up to 4190 then fell to 4060 the following days and finished the week at 4100.
The upcoming week will be interesting with several data points (see above): CPI, Retail Sales, PPI, and more. So, now the question is will we continue this rally further up to 4200+ or we sell off under 4000? Below are the levels for this upcoming week - updates will be provided throughout the week in the discord if the levels are reached throughout the week.
Upside: If we hold and stay above the 4100, we could expect to retest of 4135-4150 and if we manage to break above that then next stop is 4190-4200 and if we manage to break above then we can target 4231 (wide range due to CPI).
Downside: If we fail to hold 4100, then we could go down to test the 4060-4050 (this week's low) but failure to hold that level will open a test of 4000.
TPO chart shows single prints around 4007 and 4129.
/NQ - Emini Nasdaq 100
Similar to ES, NQ lost some steam throughout the week and our levels from last week were on point. The high of the week was 12820 and the low at 12250.
For the upcoming week, there are still earnings coming in for smaller-cap stocks and some key economic data so let’s look at the levels below.
Upside: If we hold and stay above 12400, then we can retest 12500-12650 and 12850-12875 with a chance of testing 12980-13000.
Downside: If we fail to hold 12400, then we could go down 12250-12200 (this week's low) to close the single prints and then test the critical support at 12000.
TPO has a very thin profile and multiple single print around 12490 and 12206
VIX - Volatility Index
VIX finally rallied above 20 following Powell’s speech and finished above 20. Again, this level has been critical this year.
Upside: 22.46, 23.76 (above 20 is key for bears)
Downside: 18.00, 17.00 (under 18 is key for bulls)
Stock and Options
Updates on the stocks will be provided in the discord throughout the week (link is below) 👇
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Disclaimer: This newsletter is not trading or investment advice, but for general informational purposes only. This newsletter represents our personal opinions that we share publicly for educational purposes. Futures, stocks, and bonds trading of any kind involves a lot of risks. No guarantee of any profit whatsoever is made. In fact, you may lose everything you have. So be very careful. We guarantee no profit whatsoever, You assume the entire cost and risk of any trading or investing activities you choose to undertake. You are solely responsible for making your own investment decisions. Owners/authors of this newsletter, its representatives, its principals, its moderators, and its members, are NOT registered as securities broker-dealers or investment advisors either with the U.S. Securities and Exchange Commission, CFTC, or with any other securities/regulatory authority. Consult with a registered investment advisor, broker-dealer, and/or financial advisor. By reading and using this newsletter or any of my publications, you are agreeing to these terms. Any screenshots used here are the courtesy of Briefing.com, ForexFactory, Finviz, Tradytics, Wells Fargo Advisor, and/or Tradingview. We are just end-users with no affiliations with them.
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