Daily Commentary: July 20, 2023

Auto Post1Option Commentary

No Market Worries Till Mid-August

Posted by Peter Stolcers on July 20
www.oneoption.com

Mega cap tech earnings and AI prospects will keep buyers engaged for a few more weeks.

PRE-OPEN MARKET COMMENTS – There is not much in the way of economic news this week. The focus is on earnings and the overnight news was not great. Stocks have run up into the numbers so big beats and big gaps up are less likely. The FOMC statement is only a week away. A 25 basis point rate hike is expected and the Fed has plenty of cushion to do it. The jobs numbers have been decent, wages increased on the high side, core inflation is still stubborn, the bank stress tests were good and the market has been making a new 52-week high. We might see a little nervous trading into the FOMC, but the market won’t care (yet). The hike is expected and the focus will be on mega cap tech earnings and AI. The Fed will go into recess until Sept and the market will get nervous in Aug especially if the economic numbers slip. Traders will wonder if the Fed is going to hike in Sept and most officials believe that we will see another hike after July. The “air” will get let out of the balloon after mega cap tech earnings and we will see a little profit taking in Aug/Sept. This is normal. The “rats” will flee DC on vacation and the country will be on auto pilot. I believe we will see a few more weeks of decent price action and then the bid will soften. In the article I posted to RDT yesterday you can see the normal pattern July – Sept. I would be a little cautious with longs this morning. The overnight earnings reactions were soft. Europe was up a little and Asia was down. Wait for support and use QQQ as your guide. When it finds support the SPY will find support.   $450.50 is support and resistance is the high from Wed.

Live Trading

Open an Account

Paper Trading

Register