Trade Plan for 7/31-8/4

Summer tempest or doldrums?

There are 2 kinds of shorts I like even if in an uptrend: the first is at one of my weekly levels after a measured move or extended run and the second is a look above and fail.  I subtitled last week’s note ‘Spike it’ because I wanted to see a spike big enough to comfortably short $NQ(Nasdaq futures) and/or $QQQ in particular and although we saw a nice spike Wednesday night into Thursday morning and an impressive down day on Thursday, the highs didn’t quite get high enough for me to take it.  That said, I did catch several nice longs last week, as the market continued to advance despite naysayers.✅💰

I reformatted my note to visually depict weekly levels and those performed well last week:

$ES did breakout above 4587 and then reject initially from 4604.75 and then advance higher before closing right above it.

I was watching a weekly bullflag in $GC/gold futures and while it appears on the continuous chart as a breakout (and therefore it is), the chart was substantially aided by a futures contract roll to a higher price on Friday.  This week the question is whether or not it can hold the contract roll’s almost 40 point(!) gap up.

I thought that $XOP/oil stocks would likely continue upward momentum into the first part of the week.  I decided to trade against momentum when it reached resistance there, taking a small short with a planned add at 79.5.  Despite oil initially rejecting 80, it came back again and I closed the trade with a small loss overall.  

This week @SLMacro revisits ENVX, a volatile stock that is developing a meme-like following.

Summary of Market Action Last Week:

• Choppy week for the indices as they rose Monday and Tuesday, declined and then popped on FOMC Wednesday through Thursday morning, declined Thursday from midmorning to close and then popped again on Friday to close strong.  Despite $NQ/Nasdaq futures booking the biggest gain on the week, it didn’t reach a new local high, whereas both $ES/SPX futures and $RTY/small caps both reached higher highs than the previous week.

• $GDX/gold miners and $SI/silver futures pulled back once again, but $GC/gold futures closed green for the week aided by an advantageous contract roll at the end of the week.

• $CL/Crude Oil futures continued the breakout and managed to settle the week above the much watched $80 level and $XOP/oil equities broke out to outperform the indices.

Here’s how last week closed out:

For the week ahead (7/31-8/4/23)