Week 17 Trending Tuesdays

The quarterly earnings have started to come in in droves now. I heard that 30% of the S&P 500 reports this week. We know that several Big Tech companies are reporting this week. While most of the market action has been based on what the Fed has been doing so far, now the market will likely behave based on what the companies are telling us.

This is where the rubber meets the road. What is the effect of the rates going up and also the inflation staying high for so long. The earnings expectations have been brought down over the last several months. But will the companies meet these lowered estimates? And what kind of guidance will they give for the rest of the year.

Thankfully, I do not need to guess because everything will be reflected in the price movement. There are many who say that the price does not reflect the true situation. I am not going to argue that except point out that price is the only thing that decides whether one makes money or not.

I cannot take actions based on what the market should do. I have to take action based on what the market is doing. I became a lot better trader when I was able to fully understand the value of this market truth. Now I do not fight the market. I take what it gives me.

From a trending perspective, I believe the technology ETFs are moving and changing trends.

The QQQ is close to becoming short-term bearish. The price has dipped below its 10-day and 20-day moving averages and the 2 averages are converging together. A couple of days more of downward price movement will do it. I am short QQQ although I reduced my position yesterday. I will add if and when it actually turns bearish.

The IGV has been quite strong and was perfectly bullish as of last week. All of a sudden it is looking weak and likely will go short-term bearish soon.

The XLK will turn short-term bearish after today. The 10-day and the 20-day moving averages are on each other with the 10-day curling over. The price is below both these averages. I went short yesterday.

The SMH continues to trend short-term bearish. The price has also dipped below its 50-day moving average. I have been short and continue to be short.

The ARKK just turned perfectly bearish 2 days back. The 10-day moving average dipped below its 20-day moving average and the price is below all the moving averages. I went short yesterday.

TSLA remains perfectly bearish and seems like it wants to head down. I have been trading this to the downside from just prior to the earnings release. These have been very short-term and profitable trades. I will continue to execute these trades.

Here is the trending heat map for the Big Tech stocks from the weekend.

Several of them are reporting earnings. Note that I am not going to trade the individual stocks. Except for TSLA which was too attractive not to.

Aside from technology

The XME is turning short-term bearish. I was planning to put on a trade but could not yesterday.

FXI and KWEB are both short-term bearish and basically broken. I have been trading KWEB to the downside although do not have a trade on as of now.

The XRT is about to do a death cross where the 50-day will dip below the 200-day moving average. The price is trending close to and bunched up with the 10-day and the 20-day moving averages. I am short.

LIT just turned short-term bearish.

UNG just went short-term bullish. I put on a long trade. (Probably a mistake but UNG has fallen so much that I had to make a sympathy trade). Do not have much conviction in it and may take it off soon.

IWM completed its death cross although it is still bullish for the short-term. I am short.

KRE continues to trend perfectly bearish and I feel it has another leg to fall. I am short.

Stay tuned.