Weekly Wisdom: Earnings Season in Full Swing

Greetings fellow traders and welcome to your April 25th edition of Weekly Wisdom: Levels to Know and Moves to Look For!

Now let’s get to what we’re currently seeing in these volatile markets and what we have our focus on going forward.

Taking a look back on this week, April 22 – 26:

• Markets have managed to stage a bounce after a week of net selling took place last week with $SPX futures being sold everyday for the first time since the bottom took place last November.    
• Data for the week began on Tuesday with a miss on flash manufacturing PMI coming in at 49.9 vs 52 expected; flash services PMI was also a miss at 50.9 vs 52 expected. The Richmond Manufacturing Index was inline at -7. New home sales were a beat at 693,000 vs 668,000 expected.  
• Wednesday brought a slight beat for durable goods orders m/m at 2.6% vs 2.5% expected. Core durable goods orders m/m was a slight miss at 0.2% vs 0.3% expected.  
• Thursday’s weekly unemployment claims were better than expected at 207,000 vs 214,000 expected. The Advance GDP q/q print was a solid miss at 1.6% vs 2.5% expected. Advance GDP Price Index q/q came in at 3.1% vs 3.0% expected. Prelim wholesale inventories m/m was a beat at -0.4% vs 0.2% expected. Later in the morning, pending home sales gave a solid beat at 3.4% vs 0.3% expected.  
• Friday, April 26 brings some important data to end the week with updates for core PCE price index m/m, personal income m/m, and personal spending m/m at 8:30 a.m. ET. We’ll then see revised University of Michigan consumer sentiment and inflation expectations at 10:00 a.m. ET.

Here’s what we are eyeing next week, April 29 – May 3:

Level Highlights:

• $SPX futures managed to stage a bounce to start the week after markets sold down every day in the previous week, finding a low on Monday morning at 5006 and bouncing up to a high of 5128 on Wednesday.  
• Since the bounce, $SPX futures have been hit back down on the GDP miss that came Thursday morning, as well as the large down move resulting from disappointing $META results that were released Wednesday afternoon, trading down to a low of 5026 Thursday morning but making a recovery intraday up to 5086 on Thursday afternoon.  
• Bulls still have their work cut out for them, with a need for a close over 5200 to fully take back control.  
• Bears have been putting up a good fight, but may get nervous and start to squeeze on a move over 5150. 
• $VIX has found support in the 15.50 – 16.00 zone, while finding resistance at 17.50.  Bulls and bears are watching for breaks either way for further clues on the next market break as we continue to digest last week’s sell.

Upcoming News:

• Monday, April 29 does not bring any meaningful economic data to start the week off.  
• Tuesday, April 30 begins with the Employment Cost Index q/q at 8:30 a.m. ET. We’ll then see Chicago PMI at 9:45 a.m. ET, followed by the CB consumer confidence update at 10:00 a.m. ET. $AMZN will report earnings after the close.
• Wednesday, May 1 is a big day, starting with ADP non-farm employment change at 8:15 a.m. ET. We’ll then see final manufacturing PMI at 9:45 a.m. ET, followed by ISM manufacturing PMI, JOLTS job openings, ISM manufacturing prices, and construction spending m/m all at 10:00 a.m. ET. Then in the afternoon, we get the FOMC statement and rate decision at 2:00 p.m. ET,, followed by the FOMC press conference at 2:30 p.m. ET. There is no rate change expected, with the latest rate cut expectations pushed back to at least September.  
• Thursday, May 2 brings data for challenger job cuts y/y at 7:30 a.m. ET. This is followed by our weekly unemployment claims, prelim nonfarm productivity q/q, prelim unit labor costs q/q, and the trade balance data all at 8:30 a.m. ET. Later in the morning we’ll see data for factory orders m/m at 10:00 a.m. ET. $AAPL will report earnings after the close.
• Friday, May 3 ends the week with further employment data, starting with average hourly earnings m/m, non-farm employment change, and the unemployment rate all at 8:30 a.m. ET. We’ll then see final services PMI at 9:45 a.m. ET, followed by ISM services PMI at 10:00 a.m. ET.  

Here’s Your Chart of the Week:

Via CNN Business:  After spending a very long time in the Greed Zone, markets have finally had the cool off they’ve been needing and are now back into the Fear Zone for the first time since we bottomed back in November.

Source

SPY Daily Update:

$SPY continued the selling last week to the very end of Friday, finally finding support at the 494 level and bouncing up to 506 resistance this week. We are now digesting the down move as we await for further earnings from big tech, as well as the Fed next week.

SPY Weekly Update:

$SPY continued the selling last week to the very end of Friday, finally finding support at the 494 level and bouncing up to 506 resistance this week. We are now digesting the down move as we await for further earnings from big tech, as well as the Fed next week.

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-Patrick Hawe

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Patrick Hawe’s current positions:

*As of 2:30pm ET April 25, 2024

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