Market Outlook 07/06/2022 via /r/wallstreetbets #stocks #wallstreetbets #investing

Market Outlook 07/06/2022

Recap On Tuesdays Market Action:

  • SPY closed up 0.19%
  • QQQ closed up 1.71%
  • Dow Jones Industrial closed down 0.42%
  • VIX closed up 3.07%

The major indices gapped down quite a bit today but recovered and were mostly able to close positive, with the exception of the Dow. However, the Dow isn’t as important as the Nasdaq or S&P 500 but I include it in these write ups just to be complete. Today’s price action was very constructive towards the overall market rally as it showed that early selling was quickly overpowered with buying. Even with today ending positive it is still a time to be cautious and limit exposure, especially since FOMC minutes are being released tomorrow. Typically when there is a Fed announcements the markets are quiet and tend to have low volume until the announcement is over.

SPY Daily Timeframe

SPY gapped down 1.40% to start the day and continue to drop and undercut Fridays lows. Volume dried up after breaking the lows and we did not see anymore downside. SPY then rallied throughout the rest of the day to close above Fridays highs. Volume today was slightly higher than Fridays but was still lower than than the 50 day moving average. Overall today was still productive towards the general market rally.

QQQ Daily Timeframe

QQQ gapped down 1.10%, slightly less than SPY, and quickly gained back is losses and closed well above Fridays highs. There was also an increase in volume but still below the 50 day moving average. QQQ also closed above the 8 day EMA (red line). Overall QQQ had a much stronger day than SPY and may be looking to mover higher in the next few days.

Recap on recent positions:

SSO opened approximately 2.20% lower than Friday and continued to drop. I sold half of my position as SSO broke below Fridays lows. I then sold my remaining shares as SSO approached Thursdays lows. Looking back now it would have been nice to hold but there was no way of knowing that in the moment.

As we broke into new highs I opened two new positions in both QLD and AMZN. QLD is a doubly leveraged ETF tracking the Nasdaq 100. I made two buys as QLD advance into new highs to avoid buying all of my shares at once. I also bought AMZN since it appeared to be acting stronger than other stocks

Potential Setups:

Since I am in two positions I will mainly be monitoring those and looking to add on the my existing shares.

AAPL Daily Timeframe

However, if AAPL is able to break its recent high I would consider adding a small position. Breaking these highs would be another trigger showing the higher low setup is working.

Bringing everything together:

Yesterday was a constructive day in the overall market rally. We still have a long way to go but have to start somewhere. If you decide to buy stills in the rally do so in small quantities and be sure to cut losses quickly. The worst this you could do is to go large, there are better times than now to go all in.

Submitted July 06, 2022 at 02:21PM by everyday_trades
via reddit