April 19, 2024

Markets:

Stock futures fell early Friday as the conflict between Israel and Iran was reignited. Traders also assessed the latest batch of earnings reports, including numbers from Netflix.

A person familiar with the matter told NBC News that Israel conducted a limited strike against Iran. Earlier, Iran’s Fars news agency reported explosions were heard near the airport at the country’s central Isfahan city, but the reason was unknown.

Oil prices briefly spiked more than 3% in Asia morning trading, with global benchmark Brent crude futures topping $90 a barrel. Crude futures have since given up those gains, with both the international benchmark and West Texas Intermediate futures down slightly.

The S&P 500 is heading for its worst week in almost six months. The S&P 500 has fallen for five sessions in a row — a first since October — in a retreat that has brought its week-to-date losses to 2.2%.

It would be the large-cap benchmark’s third straight negative week and its worst weekly performance since Oct. 27, 2023. The S&P 500 is now 4.8% off its 52-week high.

The market pullback has been largely driven by tempered expectations for a rate cut soon. Economists and strategists now see the Fed waiting until at least September to lower rates and are increasingly entertaining the possibility of no reductions at all this year.

Portfolio:

This past week has been among the most challenging periods to navigate in trading over the past 18 months. The market swings have been erratic, exemplified by the Dow's move from a -400 plunge last night to near flat levels this morning. From headlines of futures taking a beating to their subsequent recovery, the volatility has been nuts to say the least. It's fair to say that the recent weeks have been turbulent, with some traders feeling stuck in a rut amidst corrective phases and weaker pullbacks.

During such market conditions, it's always wise to exercise caution by reducing the number of open positions and scaling down on position sizes for new trades. Patience is key as the market digests these fluctuating headlines. As enthusiasts of technical analysis and momentum, we've observed a rather orderly price action, characterized by a gradual descent followed by reversals that impact both put and call premiums. This past week has exhibited a clear cyclical trend, evident even in the movements of gold, crude, and ES contracts, hinting at potential reversals ahead of upcoming earnings.

Technically speaking, our stance remains unchanged: unless SPY breaks and holds below 497, chasing puts here would not be the wisest move. This is still corrective action within a bullish cycle until it's proven otherwise. While the Q's raise some concerns, tech earnings present significant upside potential.

Now, it's time to refocus on our performance, acknowledging that the past two weeks have fallen short of expectations. As we head into the final trading session of the week, we're holding positions in IOT and TQQQ, aiming to identify opportunities and position ourselves for anticipated developments. For those taking a broader perspective, this pullback presents an opportunity to add quality stocks to one's portfolio, with several outstanding names trading well below their highs. History has shown that every downturn has been followed by a significant upturn for our community, a trend spanning over two decades. So, let's patiently await the setups and better believe we will absolutely attack the next level of opportunity and have be rewarded with monster returns. It's coming!