Weekly Raid #32 - Lock, SHOP, and Barrel
Good Morning Investors/Traders
Happy Tuesday. Today we have a solid dump of data due, so lets hope it doesn’t stink.
News of the day
We have a ton of News out this morning and Today in general. First up we have Home price index and the Cash-Shiller Home Price at 9 am eastern. Both obviously look at the affordability of housing in metro areas, but this trickles down to the rest of the market. There are some interesting expectation for the releases, but if we are hit with some price contraction I think we will see a positive reaction.
Next up we Have Consumer confidence at 10 am. This is more of a macro event so volatility will probably be muted from this individual release. That said, this is definitely something to watch out for. We have been significantly higher then I would have expected given how much everyone I talk to complains about the economy.
Third up we have JOLTs Job openings. This I think could be the heavy hitter on the day. A lot of talking heads are saying its a tight job market, no one can hire anyone, jobs are remaining open; but when you look at some of the actual data the picture is not so rosy. As it turns out many companies are just leaving positions open with no intention to hire anyone. This makes the number look significantly better than it is. So I think we start to see the hiring and openings number fall in tandem as it catches up to the real economic situation.
From a Macro Standpoint today we are looking at volatility. I think that the VIX is severely underpricing the possibility of a credit event as consumer debt is hitting record levels, government spending just continues unchecked, and rates are hitting 20+ year highs.
Something has to give
The plus side is with VIX pegged under 20 protection is often cheaper to buy. I am not saying back the truck up and load up on puts, but if you are up handsomely on the recent rally, it may be a smart move to sell off a little bit and buy some longer dated puts. It never hurts to protect your profits….that’s portfolio management 101.
The watchlist today is short, I did not have any really liquid tickers show up on my morning scan.
I am watching AAPL this morning, but I am always watching AAPL as a proxy for the market. We are just sitting in the middle of the yearly range on it, so until we break into a direction it will be mostly intraday scalps or short term trades. Watch over 184 and under 172 for potential breaks.
Also watching LULU today, its banging up against its yearly VAH in the premarket and trading at the lower end of a range it has been in over the past several months. If it clears 370 with volume and holds I would look to trade it back to 380-385 assuming the market isn’t in a ditch.
Finally there is SHOP. We attempted to take back a previous earnings gap below, and I think there will eventually succeed. I would keep an eye on it for a break below 51 for the rest of that GAP to get filled.
Sorry for the boring day watchlist wise, some days that’s just how it rolls.
As always trade well and Good Luck