We made it

Weekend Market Review February 3, 2023

The Markets

We did it.

We survived JPow, the FOMC, and the mega-cap earnings reports.

If you’ve been unsure of the strength in the market lately just take a look at the reaction to “missed” earnings by the big companies.

Apple missed and the stock soared.

AMZN, AXP, GOOGL, INTC, META, and NFLX, all missed earnings (according to StreetInsider.com) Each of those have been trading up over the last week or two.

It’s not the earnings report that matters. It’s the reaction that is important.

So far the reactions have been favorable. So much so that now things were looking a bit overheated. The levels of extension strongly suggest a pause, at minimum. A selloff would not be a surprise. That started at about 11:30 AM today.

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The Charts

SPX grazed the 4200 pivot and continues making higher highs and higher lows. The RSI is rising nearly reached “overbought” status. And volume has picked up. Good signs.

Now though, it’s extended above the 8/21-EMAs, even after today’s action. So some more rest here would be good. High & tight action in front of 4200 for a few days would be ideal.

QQQ touched the all-time high anchored VWAP before retreating a bit. RSI reached 73 briefly. Now this pullback is already starting. The 8-day is still roughly -2% below today's close, so there’s more room to move lower while remaining bullish.

IWM had “three soldiers” take it up and over the congestion zone. A healthy looking inside day today starts the resting process. $202 is a level to watch overhead. The 8-day EMA and the former resistance now turned support should hold any dips if it is to stay in a bullish configuration.

VIX - still trending lower

DXY - The US Dollar has perked up enough that it’s slightly concerning. A rising dollar doesn’t absolutely mean that stocks go down. But the relationship has been strong enough that we must continue to watch closely.

Watch to see-

a) Is this a bottom?

b) Can stocks still go up even if the dollar does?

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What I’m reading

The Creative Act: A Way of Being Hardcover – by Rick Rubin

This book from famed music producer Rick Rubin is like a meditation. The audible version, which he narrates himself, is excellent. He has such an ease about himself that you know the lessons are coming from the confidence of many years of experience.

Trading is a creative endeavor and one that requires a great deal of patience. This comment about impatience is right on target.

Impatience is an argument with reality. The desire for something to be different from what we are experiencing in the here and now. A wish for time to speed up, tomorrow to come sooner, to relive yesterday, or to close your eyes then open them and find yourself in another place.

The Creative Act - Rick Rubin

Maximum Trading Gains With Anchored VWAP - The Perfect Combination of Price, Time & Volume by Brian Shannon

I haven’t read this one yet but have been anticipating its arrival. It’s finally on the shelves at your favorite bookseller. My copy will be here next week. I’ll have some notes to share very soon.

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From Twitter

Two hits from this week.

This question got some really great comments.

Andrew Moss, CMT @Andy__Moss

If you could send a message back to yourself at the very beginning of your trading adventure... What would it say?

A couple of replies.

David Yocum @YocumsCharting

@Andy__Moss Just because you have less indicators does not mean you are less informed

Dillon Francis (not the DJ) @dilfrancis7

@Andy__Moss patience rewards you far greater than FOMO does

And this one really seemed to resonate with readers.

Andrew Moss, CMT @Andy__Moss

"...you can only reach new heights when you improve your mindfulness as a person. We live in a world that fights for our attention; we feel overwhelmed by so much information outside. The answer, though, is always inside." @PerceptivTrader #2023Goals

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I hope you’re enjoying and finding profits in this welcome change of market character. Of course, we can never know in advance how long it will last. So make sure you’re taking advantage while you can. Trim and trail.

And as

Thoughts from Enjoy the Ride (Tom Basso)

says,

Weekly charts in the morning.

Come join me. Ask questions. Tell a friend!

@Andy__Moss

And have a great weekend!

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***This is NOT financial advice. NOT a recommendation to buy, sell, or trade any security. The content presented here is intended for educational purposes only.

Andrew Moss is an associated member of T3 Trading Group, LLC (“T3TG”) a SEC registered broker/dealer and member of FINRA/SIPC.  All trades placed by Mr. Moss are done through T3TG.

Statements in this article represent the opinions of that person only and do not necessarily reflect the opinions of T3TG or any other person associated with T3TG.   

It is possible that Mr. Moss may hold an investment position (or may be contemplating holding an investment position) that is inconsistent with the information provided or the opinion being expressed.  This may reflect the financial or other circumstances of the individual or it may reflect some other consideration.  Readers of this article should take this into account when evaluating the information provided or the opinions being expressed.

All investments are subject to risk of loss, which you should consider in making any investment decisions.  Readers of this article should consult with their financial advisors, attorneys, accountants or other qualified investors prior to making any investment decision.   

POSITION DISCLOSURE

February 3, 2023 4:00 PM

Long: 

Short: 

Options symbols are denoted as follows:

Ticker, Date, Call/Put, Strike Price

Example: VXX1218C30 = VXX 12/18 Call with a $30 strike