Market Overview 5/28-5/31 · Trash Panda Trades

Market Overview 5/28-5/31

The Markets:

Weekly Charts on SPY and QQQ still look healthy in the zoomed out view. SPY definitely looks a little more indecisive than QQQ at the moment with a pretty "wicky" candle from last week. Could potentially signal a "short term" top or a pullback to the trend line. Will need confirm over the next few weeks. QQQ and SPY charts are telling similar long term stories but last week's candles are telling different stories so I'll be watching it closely.
Daily Charts on both SPY and QQQ are interesting. Both SPY and QQQ have made new highs recently but SPY has been making new highs on sideways consolidation for about 8 days now while QQQ has shown more strength. After a bearish engulfing candle on both charts on Thursday, we had an inside day to end the week. Which means it's hard to predict a direction. SPY weekly chart makes me anticipate a bit of a pullback next week in the first couple of days. I always trade with caution when SPY and QQQ are telling two different short term stories.
At the end of the day, the trend is your friend until the end so I remain bullish until the chart gives me a reason to change my position. Would need to see a trendline break. Anything before that is just a "higher low" pullback before putting in a new "higher high."

Economic Data:

The Fed continues their habit of talking too much again this week but other than that, there's nothing "major" on the calendar. Here are the details:

Tuesday - Fed Speaker Kaskhari at 9:55am and Cook/Daly at 1pm.
Wednesday - Fed Speaker Williams at 1:45pm
Thursday - Jobs and GDP data being released in the premarket could set some important premarket levels for the day to either scalp around or watch reactions to. Fed Speaker Williams at 12:05pm.
Friday - PCE data dropping in the premarket will provide important premarket levels as well.

Earnings to Watch:

Notable Sector Info:

XRT (retail sector) closed day 7 below the 5SMA signaling there could be some more downside to come over the next week or two.
XHB (home builders sector) also closed day 7 below the 5SMA signaling more potential downside to come for another 7 days or so.

Upcoming Events:

This Friday at 8pm EST I'll be hosting a zoom call where we'll dive into what the market holds in June to give you the tools you need to prepare for the month ahead. Hope to see you there!

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