The End of the Week will get rocking

BY ANDREW GIOVINAZZI

July 10, 2024

Yo Pit Crazies,

Sign up for the conference there are still a few spots left. Mark, Licia, Voz, Frank, Griff and yours truly will be there. Pick up your voucher here.

Every market top has their doom and gloomers. This time is no different as stocks fly on the promise of AI riches. This earnings cycle will be bigly because now some of these stocks are going to have to be put up.

I was dead wrong about Apple Inc (Ticker: AAPL) going down but it only cost me four hundred bucks. The issue I had was how AAPL would ride the AI boom but they invented a way. I was dead right about Tesla Inc (Ticker: TSLA) becoming an AI stock but not sure about timing so I bought shares and called butterflies.

What I missed about AAPL was that people won’t give up their iPhones so AAPL will figure out how to make money through there. TSLA will have practical applications for AI, robots and self-driving cars. Trading options the timing matters more than just buying stocks.

When I don’t have a sense of when, I just buy shares because I want the position. Right now in the broader market we have a list of whens:

CPI, PPI

Bank Earnings

Big Tech Earnings

Nvidia Earnings

As one can see below, stocks are still marching up in a very restrained fashion. But so is VIX.

When VIX goes up and the SPX goes up, the clock starts ticking.

Let’s check the time.

Jpow just said he was stuck between a rock and a hard place

It is hard to cut rates, and he probably does not need to raise them. With US GOV spending 800 billion a year in interest, they can only keep the spending up for so long. The worry is what happens to the rest of the economy in the meantime. From a timing point of view, that is closer to the elections.

Right now, earnings are what is going to matter. The CPI numbers might move the needle but inflation is still higher than where the Fed wants it. The bank earnings will matter but this week banks are already strong. It really comes down to bad earnings this cycle.

The up VIX and up SPX is looking for a move larger than what IV is price, that is my trick.

I think if the tech earnings don’t measure up, 5000 SPX is in play by the end of July. At that point most of Big Tech will be out. That is why Weekly Profit Cycles works. It uses time but is not dependent on time. For WPC, I am expecting a larger move this cycle. It won’t change what I do but the potential for larger dollars is there.

At the conference, I will reveal how to get time for free. You will not want to miss it.

To Your Trading Success,