The Week Ahead 10/5

Full look at the week ahead, happy Sunday!

Happy Sunday, hope you all had a great weekend!

My aim for these moving forward will be detailed in depth outlook on the indices for the week ahead, key levels, and then a few good trade setups that I’ll be looking to enter. Unfortunately, I have to travel for most of this week so screen time will be pretty limited for me. But let’s dive in here.

• ES:

  • Key Weekly Levels:

    • 6780 - above targets 6803 // 6820 // 6845

    • 6750 - below targets 6725 // 6685 // 6670

We’re in the type of market right now where bulls are fully in control until bears can prove otherwise, that 6725 area is the level where bears can take control for the week, above 6780 and bulls have the opportunity to do what they do best and squeeze out the sellers to the upper targets.

• NQ:

  • Key Weekly Levels:

    • 25075 - above leads to our new bias from the sell print @ 25179, and price exploration above that

    • 24957 - bulls in control while holding this level, below opens up 24855 and then back to critical level 24730.50

Again, bulls fully in control on NQ right now until proven otherwise. I did note on the Friday morning thoughts update, that we have started to see some large sellers stepping in as of Thursday on NQ/ES, but we will see if they get any follow thru in the early part of the week.

Overall Outlook:

Gap up tonight in globex but I honestly think this fades tomorrow and in the early part of this week, we test some of these lower key bull levels on ES/NQ, where we can attempt some longs for mean reversion. Just feels like this week is going to not be our normal up only action we’re used to but like I said, bears need to prove themselves.

I would fade 6780 until proven otherwise, and fade NQ 25075 area until proven otherwise.

Gold:

No new prints from the indicator as gold makes yet another new ATH in globex tonight. Potential look above and fail setup brewing if gold can flush back below prev ath area (3923-3918) and I’d look to short if we do get that setup. Will alert on twitter if any signals appear for reversion trades, but keeping the levels the same this week on my chart above.

Trade Setups / Options Plays:

1) SYK (Stryker) -

SYK is an interesting setup here, firing off multiple buy signals and note the recent large volume on 10/1 + price back above the high volume node 364-367 area. The option spreads are kind of bad, and with earnings on 10/30, wouldn’t recommend paying up on Nov exp. I don’t hate selling 10/17 $360 CSP’s or even leaning against 367-364 area and playing some 10/17 $360/$370 put credit spreads for ~$2.75 credit at current price.

2) META (Meta Platforms)

Pretty ugly META chart here and I would look to be a seller on any bounces to $720 area. If you don’t love shorting or playing puts, I would look to be a buyer only at $673-$675, targeting a bounce back to $700 from there. If we did get this move, and depending on when the move happened, I’d try some weekly short dated $690 calls.

If trying to fade $720 area, can do 30 DTE $700/$680 put spreads for around $8-$9 debit at current prices, with a tight stop above Friday’s $731 highs.

3) COIN (Coinbase)

Very nice move last week on COIN, but nearing some resistance here. If we open tomorrow into $392-$397, I’ll look to short commons targeting 368 to trim, below there opens up 353-349 gap fill, very tight stops just above $405.

For options, I like call credit spreads up here, depending on where we open tomorrow. If price is between $385-$390, i’d look to 10/17 $385/$390 call credit spreads. Degen move would be the 10/17 $370 naked puts.

We’ll see how it opens, but I think the upside will be capped here and we’ll get a little pullback.

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Honestly there aren’t a whole lot of good setups right now, let’s hope bears can do something and expand vol a bit to open some range.

I’ll post updates on twitter as always and alert any additional setups that show up as the week develops.

Have a great rest of the weekend!

-gtd