The LongVol Report Issue 5

Heart of Earnings & Energy Long

There’s a lot going on this week with earnings, FOMC Wednesday, NFP Friday and a new monthly candle kicking off.

The SPY 0.00%↑ and QQQ 0.00%↑ are in zones where price is technically exhausted so I expect sideways to lower as we head into this week and February. We can certainly check back a bit on a few names given the news this week in macro and earnings events.

While there is still room to run technically on the S&P there a checkback into $4750-$4800 would keep this trend breadth flowing into February. My concern is that if we just keep trekking higher without a pullback that the sell-off (which is coming) will be worse.

$4870 is really key this week on ES futures so if sellers can take control below that then we should easily see that check back of price lower.

Scenario one: We trade above $4950 this week and just hard press into $4990-$5000 which makes the move almost a blow-off top/exhaustive move - which, is good because it means a large reversal day/days occur.

Scenario two: We break below $4870 and get a leg lower which I want to personally see. That leg takes us back to $4750-$4760 where we consolidated late December and the start of January.

It’s hard to be bearish Crude and that has triggered a lot of energy longs for me - if you are in the AST Alerts Swing Portfolio it will trigger 2 more this week.

I keep saying it but the share buybacks and dividend increases in this sector are just too hard to ignore and now you have technical aligning with that so it’s just the most obvious trade to be in right now for Q1.

On the active-trading front.

TSLA 0.00%↑ - this made it into the report video this week and I talk about why a technical area is important - I could care less about the valuation of the stock here because there are easier buy and hold equities in play in this cycle to focus on - but for active-trading this does the job.

NFLX 0.00%↑ - also in the video outlook. This move is priced in from the earnings before this last one and it’s exhausted from that and technical in my view. One more leg higher maybe of $20-$30 points then we get

a) Distribution action

b) Selling

There are enough earnings events this week that there will be enough trade flow to day-trade the day after. I’ll be focusing a lot on that this week during the nightly video recaps so if you are active-trading you’ll want to watch.

Events = volatility and that creates trade flow so if you’re reading this and still doing stock scans or waking up at 4am to look at pre-market news there’s an easier way.

I wrote the post “Bankroll Management: A Lesson from Soros & Druckenmiller last month” - it’s worth a revisit as we head into the year and this week.

The fact that we have so many names vertical means that, a few, are ready to go for the jugular - so how you manage your bankroll this week and into February matters.

Read that past post.

Moving on…..

I revamped DeltaOne for 2024 - the prior years were really great but they were so complex for most that it was tough to have the member base grow so we made some changes including group mentoring sessions.

Below is the weekly outlook video for Issue 5 of The LongVol Report.