02.20.2023 | Weekly Market Newsletter | Vol. 2 Issue 8
02.20.2023 | Weekly Market Newsletter | Vol. 2 Issue 8
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 market's overall health.
STOCKS & OPTIONS - Trends, key levels, and trade targets are identified for individual names presenting potential opportunities in the market.
Weekly Review
The S&P 500 and Dow Jones Industrial Average closed lower for the week due to concerns about the possibility of the Fed raising rates more than previously expected and keeping them higher for longer than previously expected. Investors reacted to this week's economic releases, along with comments from several Fed officials. The January Consumer Price Index showed month-over-month inflation data was not pleasing, but the report reflected continued deceleration on a year-over-year basis. The positive economic news, along with accelerating services inflation, fueled concerns about rate hikes. The U.S. Dollar Index rose 0.2% for the week to 103.88. Roughly half of the 11 S&P 500 sectors logged a gain this week, while the energy sector (-6.9%) was the worst performer due to falling oil prices.
Weekly Performance Heatmap
Overall Stock Market Heatmap
Sector Performance
⚠️ Sector rotation ⚠️
Since the beginning of the year, this is the first week where Technology has lagged behind the defensive sectors.
Looking Ahead
U.S. markets will be closed on Monday for a public holiday, and the following week will be shortened. The Personal Consumption Expenditures (PCE) Deflator for January will be closely watched as it can provide insights into the future course of monetary policy from the central bank. Market participants will also receive the second reading of the fourth-quarter Gross Domestic Product (GDP) and updates on manufacturing and services activity. Internationally, CPI data from Japan, the Eurozone, and Germany will be released. The FOMC Meeting Minutes from the February 1 policy meeting will be released, and the U.S. Treasury Department is set to issue two-year, five-year, and seven-year notes. In corporate news, the fourth-quarter earnings season will continue to wind down with some big-box retailers reporting.
Earnings Calendar
Economical Events
Future & Commodities Markets
/ES - Emini S&P 500
This past week, the data releases were awful for the current narrative of interest rate cuts as the market opened above 4100 and went to 4190 before fall, down to 4060 after the data releases. Our levels from last week were again on point, as the market touched our upside target at 4190 and downside target at 4060 before bouncing to close the week.
The upcoming week will again be important with PMI, GDP, and FOMC meeting min from Jan meeting will provide insights on the dot plot for the terminal interest rate. So, now the question is will we continue this rally and create a new high 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 this week's high.
Downside: If we fail to hold 4100, then we could go down to test the 4060-4050 (this week's low) again but failure to hold that level will open a test of 4000.
TPO chart shows single prints around (downside) 4007 and (upside) 4108 & 4124.
/NQ - Emini Nasdaq 100
Similar to ES, NQ has started to lose steam, and the technology sector started lagging behind defensive sectors. For the past week, it was another week of consolidation as it was an inside weekly candle with the high at 12800 while the low was 12265.
For the upcoming week, let’s look at the levels below.
Upside: If we hold and stay above 12400, then we can retest 12500-12650 and 12850-12875 (this is key to break out of the consolidation zone).
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 (upside) 12475, 12512 & 12604 and (downside) 12206 & 11790.
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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