6.9 C
New York
Friday, December 1, 2023

S&P 500: 4400 Resistance Looms as Index Draws Fresh Breath From Hot Retail Sales

 

US500
-0.01%

Add to/Remove from Watchlist

Add to Watchlist

Add Position

Position added successfully to:

Please name your holdings portfolio

Type:

BUY
SELL

Date:

 

Amount:

Price

Point Value:

Leverage:

1:1
1:10
1:25
1:50
1:100
1:200
1:400
1:500
1:1000

Commission:

 

Create New Watchlist
Create

Create a new holdings portfolio
Add
Create

+ Add another position
Close

CL
+1.83%

Add to/Remove from Watchlist

Add to Watchlist

Add Position

Position added successfully to:

Please name your holdings portfolio

Type:

BUY
SELL

Date:

 

Amount:

Price

Point Value:

Leverage:

1:1
1:10
1:25
1:50
1:100
1:200
1:400
1:500
1:1000

Commission:

 

Create New Watchlist
Create

Create a new holdings portfolio
Add
Create

+ Add another position
Close

NFLX
-1.41%

Add to/Remove from Watchlist

Add to Watchlist

Add Position

Position added successfully to:

Please name your holdings portfolio

Type:

BUY
SELL

Date:

 

Amount:

Price

Point Value:

Leverage:

1:1
1:10
1:25
1:50
1:100
1:200
1:400
1:500
1:1000

Commission:

 

Create New Watchlist
Create

Create a new holdings portfolio
Add
Create

+ Add another position
Close

TSLA
+0.39%

Add to/Remove from Watchlist

Add to Watchlist

Add Position

Position added successfully to:

Please name your holdings portfolio

Type:

BUY
SELL

Date:

 

Amount:

Price

Point Value:

Leverage:

1:1
1:10
1:25
1:50
1:100
1:200
1:400
1:500
1:1000

Commission:

 

Create New Watchlist
Create

Create a new holdings portfolio
Add
Create

+ Add another position
Close

US10Y…
-0.16%

Add to/Remove from Watchlist

Add to Watchlist

Add Position

Position added successfully to:

Please name your holdings portfolio

Type:

BUY
SELL

Date:

 

Amount:

Price

Point Value:

Leverage:

1:1
1:10
1:25
1:50
1:100
1:200
1:400
1:500
1:1000

Commission:

 

Create New Watchlist
Create

Create a new holdings portfolio
Add
Create

+ Add another position
Close

US20Y…
-0.26%

Add to/Remove from Watchlist

Add to Watchlist

Add Position

Position added successfully to:

Please name your holdings portfolio

Type:

BUY
SELL

Date:

 

Amount:

Price

Point Value:

Leverage:

1:1
1:10
1:25
1:50
1:100
1:200
1:400
1:500
1:1000

Commission:

 

Create New Watchlist
Create

Create a new holdings portfolio
Add
Create

+ Add another position
Close

Yesterday was a busy day for stocks, as rates exploded to the upside following the hot retail sales report. This led to a sharp decline in the morning for stocks, only for the declines to be erased and the index to turn positive midday. However, those gains were later returned, with the S&P 500 finishing flat.

S&P 500: 4400 Resistance Looms as Index Draws Fresh Breath From Hot Retail SalesS&P 500 Index-1-Min Chart

The big gamma level is at 4,400, which will be significant resistance for the S&P 500 the rest of this week, as well as two big events coming with a 20-year Treasury auction yesterday at 1 PM ET and then Powell speaking on Thursday at noon.

So there is a pretty good chance we see implied volatility move up into the two events, and with resistance at 4,400 and implied volatility on the rise, it could lead to that drop to lower, erasing the move higher off the lows on October 6.

Wave C equals 78.6% of wave A of larger C, so yesterday’s high at 4,392 works for a potential top.

S&P 500: 4400 Resistance Looms as Index Draws Fresh Breath From Hot Retail SalesS&P 500 Index-15-Min Chart

10-Year Rates Rally Post Retail Sales

The 10-year rose sharply yesterday and made a new cycle closing high; it didn’t take long for it to come and test the highs of the past 2-weeks. If it did break out of a bull flag, then I think it is possible for the 10-year to push higher to around 5.25%. The economy and inflation rates support higher yields at this point.

S&P 500: 4400 Resistance Looms as Index Draws Fresh Breath From Hot Retail SalesUS 10-Yr Bond Yield-Daily Chart

Crude Oil Forms Bull Flag

For now, oil has been playing nice, but I’m not sure how much longer that will be the case, especially if a bull flag has formed in oil; if so, then oil is probably heading back over $90 on WTI.

S&P 500: 4400 Resistance Looms as Index Draws Fresh Breath From Hot Retail SalesWTI-2 Hour Chart

Tesla to Remain Flat Post Earnings?

Today we will get into the heart of earnings season with results from Tesla (NASDAQ:TSLA). The market is not expecting a big move. An at-the-money long straddle for expiration on Friday suggests the stock moves about 5.7% the rest of the week.

What is noticeably different going into this quarter’s report versus prior quarters is that implied volatility is much lower, and the IV for puts is trading higher than the calls. That could change yesterday some, but that is not what was seen in July. This may suggest we don’t see a big move in the stock today.

S&P 500: 4400 Resistance Looms as Index Draws Fresh Breath From Hot Retail SalesTesla Price Chart

Netflix: Big Move in the Cards Following Earnings?

The opposite is true for Netflix (NASDAQ:NFLX), with implied volatility ramped up and near some of the extremes seen in prior results. However, this time the PUTS carry the higher implied volatility, versus the calls in July. Additionally, an at-the-money long straddle for Friday’s expiration suggests the stock moves about 8.25% the rest of the week.

S&P 500: 4400 Resistance Looms as Index Draws Fresh Breath From Hot Retail SalesNetflix Price Chart

There is also a large amount of put gamma, around $350, which could act to support the stock. So, as long as the results aren’t some disaster, it seems possible for the shares to rally if implied volatility falls sharply, causing dealers to unwind put hedges. However, bad results, that push the shares below $350 could lead to a significant decline.

S&P 500: 4400 Resistance Looms as Index Draws Fresh Breath From Hot Retail SalesOptions Activity

Original Post

Source: Investing.com

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Stay Connected

11,268FansLike
12,893FollowersFollow
730FollowersFollow
- Advertisement -

Latest Articles

Popular Articles