After a short week last week, our focus is on structure.
The S&P 500 (/ES) is trading below its trendline structure, which leads us to lean more bearish. On Monday, the /ES gapped up and failed to key levels.
The major catalyst this week is the Consumer Price Index (CPI) report released on Friday. We’ll follow up in the Thursday newsletter to hone in on how this inflation report can affect price action.
We’re also watching two specific events on SHOP and AMD.
On Tuesday, the SHOP 10:1 stock split voting will occur. On Wednesday, AMD has a financial analyst day, which could impact price.
In the video above, we’ll review the new liquidity levels on /ES, lay out key zones and structures, and walk through our favorite setups that we’re keeping an eye on.
Here is our focused list:
SHOP — There is a large flag forming. Be patient for the stock split news as this will be a large catalyst, up or down. If SHOP works its way up to $383 and the daily 21 EMA, this could be a short opportunity. If SHOP moves through $383, we can look for it to move to the trendline structure. The same goes for the downside. If SHOP breaks $383 and moves lower, we can look for it to break to the trendline and either pop back or drop lower.
AMZN — This is the first week since the 20:1 stock split. Practice patience and observe the options premium. AMZN has a big gap to fill from $130 to $140. If AMZN continues to fail at its key zone and reverses, we’ll look for a short to the $121 range with the daily mean near $118.
AAPL — If AAPL pops toward $148 and above the daily mean, we could look to short it. Note that POC is at $145.44. If AAPL fails and drops, see if it breaks structure and heads toward the $140 range. If AAPL holds POC, AAPL could pop to $152 to $154.
Stay Focused!