Pandas Weekly Newsletter 10/1

Every week we review everything you need to know about the stock market for the week ahead as an active or passive trader.

Market Big Picture & Long-Term Technicals

In last weeks newsletter we discussed the market closing on key support with bears in control. The next target down was 4262 and then 4162 as major support. 4262 tested multiple times throughout last weeks session with one undercut to 4238 followed by a reclaim and relief rally. This week will be about defending 4262 on dips and attempting to reclaim 4325. The markets bounce is more constructive above this level and sets up a bid back to 4400.

All eyes will be on futures this evening with the government shut down news.

“U.S. Senate Bill To Avert Government Shutdown Gets Enough Votes To Advance” (C-SPAN/Benzinga)

Economic Calendar & Earnings

Top 5 Things to Watch

*provided by investing.com and summarized with chatgpt

1. Nonfarm Payrolls: The U.S. will release its employment report for September, with economists expecting the addition of 163,000 jobs. A stronger-than-expected reading may reinforce the Federal Reserve's commitment to keeping interest rates high, affecting markets.

2. Powell Comments: Federal Reserve Chair Jerome Powell and others will participate in discussions. Recent data showed progress on inflation, but rising oil prices suggest a prolonged path to the Fed's 2% inflation target. The Fed is expected to raise rates once more this year.

3. Equity Markets in Q4: The fourth quarter begins after a weak third quarter for stocks. Surging bond yields are causing concerns, especially for tech and growth companies. Q4 will bring another earnings season, and there are questions about the potential for profit growth.

4. Lagarde Speech: ECB President Christine Lagarde will speak, and investors are keen to hear about the future path of interest rates after Eurozone inflation fell to a two-year low. The ECB previously raised rates to combat high inflation.

5. RBA and RBNZ Meetings: The Reserve Bank of Australia, led by new governor Michele Bullock, will meet. Investors are looking for hints about future rate hikes. The Reserve Bank of New Zealand is also meeting, but no rate hike is expected; attention is on possible signals for a future move.

Overall, the report highlights the importance of economic data, central bank actions, and inflation concerns in shaping market sentiment in the coming week.

source: (investing.com econ calendar + Top 5 things to watch)

*no notable earnings this week… TLRY 0.00%↑ could be interesting though.

Near Term Outlook & Trade Plan

SPX 4325 targets 4375

SPX 4261 - 4325 = chop zone

SPX 4261 targets 4238, 4220

Pandas Weekly Watchlist

Our Favorite Trade Setup - SPY over 431.73

Contract: SPY 10/3 434c

Levels: 434, 437.92, 441.11

Stop: 430 using 15m candle

Notes: SPY 0.00%↑ Has a nice setup for continuation of the recent bounce over the 431.73 level. Its entirely possible that it gaps over this level on Monday considering that the government shutdown may have been avoided. If it gaps over this level then we will adjust and look for an intraday setup opportunity. This will be the easiest way to simplify market-wide news plays.

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