The Mental Markets Issue 35
Shoutout to all those Americans over age 140
Good evening everyone! Hope you all had ANOTHER great long weekend! As expected tons of shakeups happening in Washington as far as the new administration and DOGE with plenty of people angry which will likely continue to bring volatility on headlines this coming week. I want to take a moment to congratulate all those American’s aged 140-190 that are still receiving SS benefits, what a feat that is! Satirical, of course but what they are uncovering on spending is truly remarkable. Anyways lets take a look at the markets and what we are expecting this week! For starters SPY 0.00%↑ has been a pretty boring range as of late between 595-610 closing just below the ATH made on Friday. Taking a look at the daily chart we obviously have 611 as our ATH break and blue skies, I want to point out the two zones Im watching on any pullbacks.
SPY 0.00%↑ daily zones to watch
My golden zone for the last few weeks is 603-605 this is a previous resistance zone as well a previous support and congestion zone. If we get a pull back this week I expect buyers to show up there and defend once again, The gold zone is illustrated below on the chart with 597-599 being our second leg of support on a pullback
Trade Recap of the week
This week I want to go over SNOW 0.00%↑ which not only was a core plan in the room but was also shared publicly via twitter. We were looking at the 190C for the week in this name I illustrated this with the 15 minute short term chart and the trend of the last week. we were looking for trend break with the move to 189/193
We entered this trade on the 12th as we got the trend and resistance break. Illustrated below on the hourly chart. With the strength of the close we held overnight and got the move we were looking for early the next day good for a 100% gain on our calls
The strategy was laid out in Last weeks newsletter but if you’d like to join us live in real time where Ben and I share our thoughts and charts live as the day is unfolding along with when we have something on watch and our live entries, stops and targets consider joining us in the room @ TheAltitudelife.com for Less than $3 a day, Its like this newsletter but Live every single day!
Chaz’s Watchlist
This week I’m watching TSLA 0.00%↑ for a rebound after it has been getting whacked hard. Below is the Hourly chart which has broken our short term downtrend come up and tested resistance then retested the trend breakout. Im looking for TSLA to regain the 360 level to target 370/383 I will be looking at weekly 370/375 calls in this name if we can sustain over 360
second up this week is PYPL 0.00%↑ another name that has beat down on bad earnings. I’m looking for a bounce in this name after a week of bottoming. The key level im watching is 78.85. Over that I will look at 80C with a target of 82+
Last up for me this week is a volatile name that has clawed its way back to an important level SMCI 0.00%↑ this has had a hell of a run from Feb lows nearly doubling but if you know this name you know it can do a hell of a lot more than that.
The 48 level on this name is MASSIVE and if we get acceptance of that I like this name for a gap fill toward the 55 price level. acceptance over 48 gets me long via the 50$ calls.
That’s it for me this week guys let’s have a great week!
If you’d like to join us live in real time where Ben and I share our thoughts and charts live as the day is unfolding along with when we have something on watch and our live entries, stops and targets consider joining us in the room for Less than $3 a day, Its like this newsletter but Live every single day! https://www.launchpass.com/the-altitude-life/lp-membership
From Ben: The $SPX closed strong last week up 1.5% led again by the Nasdaq to fresh new all-time closing highs, current price action is in no way bearish and as we monitor most indicators they remain bullish. Sentiment readings are mixed with it stretched in some areas and favorable in others. Markets continue to be resilient in a clear bullish trend that now looks poised to unleash a potential surge to highs as this multi month consolidation range could result in a gamma squeeze of sorts heading into Feb monthly expiration this week. The SPX closing back over 6100 is positive and we know that is a huge gamma level so you can see that Vanna and Charm drift start to kick in with that 6165 still in mind short term. Further VIX contraction should create fuel for new highs that could target some even higher targets at some fib extensions at 6190 and 6225 while a higher extension target at the 1.618 fib would be at 6300 and possibly an eventual target into March. Support now moves up to the 8 EMA at 6075 and the 21 EMA of 6050 and 6050 now becomes more major gamma support. Big picture wise the 6000 level is a clear line in sand for risk on action and any weekly close below that level from here would be a good sign to lighten up exposure but for now with sentiment is just below average levels and breadth expanding, it points to new highs likely on deck but we will need to see the rally continue to broaden out and still think IWM 0.00%↑ is the key for that 6300 target. Ideally early this week on the daily we would create a 2-3 session flag after Thursday’s big day before another push with the Stoch topped out at 100 right now.
$SPX levels for the week: 6005/6020/6035/6050/6066/6075/6088/6100/6115/6128/6140/6165/6190
Sentiment/Indicators: AAII sentiment for the week ending 2/12 showed bullish responses fell to 28.4% from 33.3% prior while bearish responses rose to 47.3% from 42.9%. This is a huge indicator that we could see higher as 50% is rare on AAII. Neutral sentiment rose to 24.3% from 23.8%. The bull-bear spread declined 9.3 percentage points to –18.9%. The bull-bear spread is below its historical average of 6.5% for the sixth time in eight weeks. The NAAIM Exposure index fell to 75.62 from 84.91 last week and is below last quarter’s Q4 average of 85.81. Friday’s close saw NYSE new highs at 114, while new lows of 39 and the 10-day MA of New High/Low Differential is positive at +23. The percentage of SPX stocks above their 50-MA is 54.4% while those above their 200-MA was 60.0%. NYMO McClellan Oscillator closed at +16 and is Neutral. The cumulative AD line is moving to new fresh highs and is above the 40 EMA short term breadth trend and above the 89 EMA long term bull signal. CBOE Equity P/C 50-day MA is at 0.55. CNN Fear and Greed index is still in the Fear zone at 44 from 38 last week.
$NYSI remains in bull mode and looks to have some room higher on RSI so again with breadth the way it is have a good shot at some new ATHS and a push to 6165/90 this week
Earnings continue apace this week and some good ones still out there:
As far as market moving events this week there isn’t much but we do have some data this week. Manufacturning numbers Tuesday morning can be a kick in the but for TLT 0.00%↑ and possibly more juice after that soft retail number to push rates lower.
Watchlist: MASI 0.00%↑ ADP 0.00%↑ BECN 0.00%↑
MASI 0.00%↑ has based nicely now in an uptrend for a few months, it does have ER upcoming but looks really nice here for a possible run up.
Breakout: 182
Targets: 185/188.5/193/197
ADP 0.00%↑ another nice looking base in a strong uptrend. This one has plenty of room on RSI and has ER out of the way.
Breakout: 310
Targets: 318/321.5
BECN 0.00%↑ is a stock that is reliant on rates and XHB 0.00%↑ and has held up far better than other stocks in the sector and now has some tight consolidation here. ER is upcoming but chart looks really good for a break prior.
Breakout: 120.5
Targets: 125/131.5
Many more setups are shared in the room so think about coming and checking us out!
Have a great week!
If you’d like to join us live in real time where Ben and I share our thoughts and charts live as the day is unfolding along with when we have something on watch and our live entries, stops and targets consider joining us in the room for Less than $3 a day, Its like this newsletter but Live every single day! https://www.launchpass.com/the-altitude-life/lp-membership