EB Daily Market Report - Tuesday, July 18, 2023
Announcements
Trading Places Live Show
I know that many of our members have voiced their concerns over not having a Tuesday and Thursday show that starts at 9:00am ET. We've been working on a solution, while also wanting to incorporate a weekly Wednesday Live Trading Room. We've reached a compromise. For most weeks, this will be our new schedule:
- Tuesday 9:00am: Trading Places Live (roughly 30 mins)
- Wednesday 9:00am: Trading Places Live (roughly 30 mins)
- Wednesday 10:00am: Live Trading Room (30-45 mins, flexible) - MEMBERS ONLY
- Thursday, 9:00am: Trading Places Live (roughly 30 mins)
We had a TP Live show on Monday of this week, but we will NOT have one on Thursday as I'll be traveling out of town. Next week, we will start the schedule laid out above. Tuesday through Thursday.
Model ETF Portfolio
We will be implementing a couple changes to our Model ETF Portfolio draft and webinar. We already know that the 19th to the 25th of each calendar month historically has been more bearish than any other period of the month. Our portfolios in the past have also gotten off to rough starts, probably due to this historical factor. So beginning this month, we're going to modify our schedule a bit.
First, our current Model ETF Portfolio will be "sold" at tomorrow's close (July 19th) as we normally do. However, we will not begin our next Model ETF Portfolio until next Tuesday's close (July 25th). We will treat the portfolio as though it is in CASH, until purchases are made as of the close next Tuesday. As a result, we are moving our Model ETF Draft event from tomorrow afternoon at 5:30pm ET to next Tuesday's close, July 25th, at 5:30pm ET.
July Max Pain Event Later Today
At 5:00pm ET this afternoon, we'll be hosting our latest Max Pain event. I'll review last month's results, the July Max Pain report that was sent out over the weekend, and discuss the potential impact of max pain on our major indices and select ETFs/stocks over the course of the next week to 10 days. Room instructions will be sent out separately today. If you cannot attend today's live event, a recording will be made available for you later this evening or early tomorrow morning. I hope to see you there!
ChartLists Updated
Over the weekend, I updated the following ChartLists:
- Strong Earnings (SECL)
- Strong Future Earnings (SFECL)
- Raised Guidance (RGCL)
- Short Squeeze (SSCL)
- Upcoming Earnings for each day this week
- Upcoming Earnings - Relative Strength for all companies reporting earnings this week
These ChartLists are available for downloading/viewing, if you haven't already done so.
Executive Market Summary
- Futures were relatively flat at the opening bell
- It's been a day of accumulation, however, as stocks have been climbing mostly since the open
- Crude oil ($WTIC, +2.08%) is rising and is approaching $76, while most other commodities are higher as well
- Energy (XLE, +1.30%) is benefiting from the higher crude, though the sector still trails technology (XLK, +1.58%) on the session
- Software ($DJUSSW, +3.55%) is surging today as Microsoft (MSFT, +5.22%) announced $30 per month AI subscription for Microsoft 365
- The 10-year treasury yield ($TNX) is flat at 3.80% as the bond market prepares for another rate hike and Fed meeting next week
- Overall, it's been another excellent day for U.S. equities, despite options expiration looming
Market Outlook
Gold (GLD) is having another strong day and it's absolutely trending higher right now on an absolute basis. However, what most gold bulls do not understand is that it continues to underperform the S&P 500. First, let's discuss why GLD is rallying. It's all about the U.S. dollar (UUP):
The dollar has had a rough July thus far, and because gold is denominated in dollars, there's an inverse relationship that we need to be aware of. However, my research says not to be interested in GLD as a relative performer unless the VIX begins to scream higher and that's simply not the case right now.
If I looked at any other chart besides GLD, this type of breakout and recent bounce off the now-rising 20-day EMA would generally excite me. But knowing that the Volatility Index ($VIX) remains so low tells me to avoid GLD as it'll likely remain a relative underperformer, even if it goes higher on an absolute basis.
Sector/Industry Focus
Hotels ($DJUSLG, +0.81%) are regaining steam to the upside, after clearing 2900 and its resistance just below that level:
The absolute price action is the good news, along with a beautiful uptrend in place. However, check out that relative downtrend line. I like the recent breakout in hotels, but if you're looking for them to add "juice" to your portfolio, they'll need to clear the relative downtrend line in play.
ChartLists/Strategies
It's difficult for me to trade individual stocks right now, given that it's max pain week and we're so terribly overbought short-term. If I were to trade, it would probably make sense to trade areas that have been beaten down and are just now coming to life - like financials. Lots of bad news is priced into many of these stocks. Charles Schwab (SCHW, +12.14%), for instance, did manage to beat both revenue and EPS estimates slightly, but its earnings reaction was MASSIVE as expectations were so low. SCHW is the top-performing stock in the S&P 500 today, nearly doubling its closest rival - Morgan Stanley (MS), another financial.
Earnings Reports
Here are the key earnings reports for the next two days, featuring stocks with market caps of more than $10 billion. I also include notable companies with market caps below $10 billion. Finally, any portfolio stocks that will be reporting results are highlighted in BOLD. If you decide to hold a stock into earnings, please understand the significant short-term risk that you are taking. Please be sure to check for earnings dates for any companies that you own or are considering owning.
Tuesday, July 18:
BAC, NVS, MS, PLD, LMT, SCHW, PNC, IBKR, BK, OMC, JBHT, SYF, HAS, MLI, WAL, HWC, FULT, AIR
Wednesday, July 19:
TSLA, ASML, NFLX, IBM, GS, ELV, USB, CCI, LVS, KMI, BKR, HAL, DFS, EFX, NDAQ, MTB, STLD, UAL, NTRS, CFG, REXR, ALLY, FR, AA, CBSH, ZION, CALX, SLG, MRTN, MCRI
Economic Reports
June retail sales: +0.2% (actual) vs. +0.5% (estimate)
June retail sales less autos: +0.2% (actual) vs. +0.3% (estimate)
June industrial production: -0.5% (actual) vs. +0.0% (estimate)
June capacity utilization: 78.9% (actual) vs. 79.5% (estimate)
May business inventories: +0.2% (actual) vs. +0.2% (estimate)
July housing market index: 56 (actual) vs. 56 (estimate)
Happy trading!
Tom