4/22 Daily Market Note: Investors Waiting Until FAAMG Earnings Before Betting On Recovery
Can FAAMG Earnings turn the tide?
Hey Everyone - hope you had a great weekend.
A challenging but good start to the week as we issued a few scalping opinions that have worked well leading up to this post.
Yesterday evening, I shared that my model suggested we may trade higher first at some point throughout the following windows: Sunday Futures Opening, pre-market session, and early in the cash session. At the same time, I labeled any bounce to be a dead cat bounce until FAAMG earnings are in.
This morning in our Pre-Market Plan, I shared my observation that ES 5035-5037 and NQ 17310-17315 were my upside targets for the day. Anything beyond this was purely a bonus.
Let’s examine the NQ (Nasdaq-100) auction below as of this post. Black lines represent our upside target (17310-315) for the session.
While I of course hope that the market can bounce from here as that would benefit everyone, I am forced to be extra conservative in all my upside targets as long as the the indices don’t reclaim some simple moving averages.
In bearish environments, I most likely have to lower my profit targets and accept smaller returns.
Some may wonder why I do not typically mention short setups when market conditions are bearish. This is because based on my journaling of statistics, I am more successful on the long side. Not that I completely avoid short-selling, but it’s only about 5-10% of my transaction activity. I would much rather trade the long side because I do not want to have an Opportunity Cost if the markets are about to recover/rip higher. Short squeezes can be excellent bullish scalps.
Shorting can add significant alpha to your portfolio if your timing is on point. But if the market rips higher, shorting essentially widens your gap against the index at twice the pace.
I would consider one my Substack friends
to be phenomenal at short-selling. He is very good at it. For me, I enjoy trading the long side for opportunities.Let’s talk about some key levels on NQ (Nasdaq-100) as well as brief commentary on FAAMG earnings that I have planned for reactions if they come to us.