October 19, 2022

Markets:

U.S. stock futures gave up gains from earlier in the day Wednesday, even after the release of strong quarterly results from Netflix.

Netflix shares rallied 13% after the streaming giant posted earnings and revenue that beat estimates as well as strong subscriber growth for the third quarter. Other tech-related names such as Meta, Amazon and Microsoft traded higher in the premarket.Tech earnings will be in full swing next week, but IBM and Tesla are on deck to report Wednesday. Social media firm Snap will report later in the week.

In economic data, investors are looking forward to housing starts on Wednesday. The Federal Reserve’s so-called Beige Book, the central bank’s report on the current state of economic conditions, will come out as well.

Futures of West Texas Intermediate crude moved up around $1, or 1.33% and futures of Brent crude rose $0.83, or 0.92% as the Biden administration is expected to release more oil from the U.S. Strategic Petroleum Reserve.

Portfolio:

We enter the new trading session well positioned for this morning's weakness holding set-ups in JKS, LI, KLIC, MPW, and PARA. We will continue to point out the trend lines that matter and these trend lines have proven over the last 60 days or so to be key trading points. Under 3720 in the S&P gets extremely slippery. Above 3740 on the S&P with a hold and we could melt up for weeks. Just watch these closely. 3500 remains the hard line right now. I do think we are getting closer to massive opportunity due to mid-terms and year end trade cycles emerging as well. The earnings we receive will provide short term fuel as well.

Many seemed to turn a bit bullish after NFLX earnings yesterday, but we will continue to point to yields and the dollar. Continue to monitor the TLT as well. Paints a very different picture. Short term bulls will struggle to maintain positive price action when yields and the dollar behave as they currently are.

Be ready today. Allow this morning's price activity to develop and then we proceed. Let's have a great session and remain patient as further set-ups will emerge.