Pandas Weekly Newsletter 3/12
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
Last week we discussed the consolidation outside the weekly breakout in January and how it was setting up for another leg higher targeting 4280-4325. This got invalidated by a slew of hawkish headlines paired with SIVB 0.00%↑ bank collapsing. This bearish turn led the market to a break and close below 3900. This week is full of economic headlines and likely to continue to see whipsaw type price action and heightened volatility. The $VIX increased 55% from the start of the week to the peak, one of the fasted spikes since early last year.
Technicals aside, given this increase in volatility, it’s important to consider some of the following tactics:
Simplifying trades by using shares
Sizing smaller + using a wider stop
Adjust expectations for daily movement in the market, a 10pt move with a VIX < 20 is not the same as > 25. I like to use roughly a 10-15pt buffer on key SPX levels
If the market holds below 3900 it’s setting up for a breakdown to 3800, 3724 next. Best case for the upside would be a recapture of 3950+ this week. As always, we’ll trade each day one at a time, level to level.
Economic Calendar & Earnings
source: (investing.com)
Notable Earnings: ADBE 0.00%↑ FDX 0.00%↑
source: earningswhispers.com
Near Term Outlook & Trade Plan
$SPX failed the 200d last week and lost 3900.
SPX 3928 targets 3950, 3972, 4000
SPX 3850-4050 = chop zone
SPX 3850 targets 3800, 3764, 3724
Pandas Weekly Watchlist
Our Favorite Trade Setup - AAPL under 147.18 or over 151.16
Contract: AAPL 3/17 152.5c
Targets: 152, 153.60, 156.33
Stop: 149.30
Notes: AAPL is in a pretty defined range between the 151 and 147 levels. I like this one for a play over/under either level. If we break over 151 then it looks good for a push to the upside and if weakness in the market continues then I like a break under the 147 level for puts.
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