HaiKhuu Daily Report 02/05/2024
Good morning, and happy Monday! Hope you all had a wonderful weekend and are ready for what should be a fun week!
We have many major earnings this week including Alibaba, Disney, Ford, and Snapchat. There is not much major economic news this week, but watch out for Jobless claims this Thursday.
Jerome Powell stated on 60 Minutes that rate cuts are coming soon, so prepare accordingly. Rate cuts are great for the general economy, but negatively impact equities in the short term. Predictions are pricing in a rate cut in May, so prepare accordingly. That means capitalizing on the opportunities that are available in these market conditions and realizing as many gains as possible prior to a shift in the general markets.
Good luck trading, and let’s see what the markets do this week!
The updated $SPY daily levels are as follows:
Conversion Line Resistance: $489.46
Baseline Support: $481.24
Psychological Support: $480
Daily Cloud Support: $467.82
$SPY Daily Candles - [02/02/2024]
Thoughts & Comments from Last Week
Last week was a crazy week for the markets with multiple organizations and indices hitting new ALL-TIME HIGHS. Conditions were strong despite watching the markets react negatively towards interest rates remaining the same. $META rallied significantly, achieving a $1T market cap, and making an official all-time high trading at $485.96. Many traders realized a significant amount of gains while trading last week, and I hope you all had an amazing time!
We started the week with $SPY trading at $487.73, market conditions were extremely strong as we continually rallied and made new all-time highs throughout the day. Momentum was slow around open, but conditions were perfect as $SPY rallied and made an all-time high trading at $491.42, before coming back down slightly into close. Conditions were beautiful and presented traders with phenomenal opportunities to start the week off.
Tuesday was a relatively flat day for the markets, which was expected as Wednesday we had the Fed’s decision on the interest rate, and Jerome Powell speaking, which made Tuesday relatively boring. We opened the day with $SPY trading at $490.56, made the high of the day trading at $491.62, and sold off to close the day trading at $490.89. There was a staggering movement of $0.33 from open to close, but again, we expected a relatively flatter day knowing what was happening on Wednesday.
Wednesday was when the fun started for the week. We watched as $SPY opened the day trading at $488.62, down from the previous close as $GOOGL, $AMD, and $MSFT had positive earnings, but underperformed general sentiment, impacting the markets heavily during the after-hours & pre-market session. We watched as $SPY chopped around in the morning giving us a couple of trading opportunities, but nothing significant happened until 2 PM EST when the Fed’s decision on the interest rate came out. Rates remained the same as $SPY dropped, and we watched as Jerome Powell caused the markets to quickly recover to test the high of the day before we saw the largest amount of selling in an extremely short period of time. $SPY dropped to make the official low of the day leading into close, trading at $482.86, meaning it had dropped almost $8 from the previous close, and $6 on an intraday basis. It was the worst intraday market movement we’ve seen in 2024, but many people were able to load up at the bottom and profit off of what was an insane dip buying opportunity.
Thursday was a day full of fear in retail, but a day of confidence and gains in our community. There was some phenomenal bullish momentum in the markets that we could have very easily capitalized on with confidence. The day started with $SPY trading at $484.63, and conditions were weak, but many organizations were highly oversold, and there were many great opportunities to load up on equities at a phenomenal price and buy the dip. Markets rallied to make the official high of the day leading into close, as $SPY ended the day trading at $489.20, recovering all of the losses that were incurred the day prior. It was an amazing day for the markets with even better opportunities across the board.
Friday was just as the kids would say, “The bee’s knees”. Market conditions were strong as we made the new official all-time high on $SPY, and many organizations continued their rally. We started the day off relatively slow with $SPY opening at $489.62, but displayed a significant amount of bullish momentum from the get-go. Markets rallied significantly throughout the entire day, only slowing down around the lunchtime lull, and continued to display significant strength throughout the rest of the day. We watched as $SPY made the official high of the day, and an all-time high trading at $496.05, and looked extremely strong in the process. We watched as momentum slowed down in power hour, and watched as $SPY sold off slightly to end the day trading at $494.35, up $5.15 from the previous close, or up a little over 1%, with an intraday bullish movement of $4.73. There were many great opportunities to trade as many people in our community realized a significant amount of gains in the process.
It was a great week for the markets. There were some rough patches where losses could have been generated, but overall there were many opportunities to trade with confidence and realize a significant amount of gains in the process. Lots of organizations rallied as $SPY hit new all-time highs, but it was a matter of catching them in real-time and picking the right organizations to trade. Hopefully you all were able to enjoy last week and are excited to see what happens in the markets this week!
Heatmap - $SPY 02/02/2024
Thoughts & Comments for Today, 02/05/2024
Today should be an interesting day to start the week. With the way the markets stand right now, we are down slightly from the previous close and are displaying short-term weakness after $SPY has continued to hit all-time highs. I would not attempt to be overly bullish in these conditions, but remember that market conditions are still extremely strong and that we are in a place of confidence. But this confidence does not mean that markets are going to indefinitely continue to move up. I would advise you all to tread extremely lightly and simply follow the general market momentum. It is too soon to be bearish in the markets with confidence, but conditions are not primed at this point to continue to trend. We are in uncharted territories with this market strength, so maximize the opportunities that are available, but don’t be overly ambitious, and make sure to practice risk management.
I am not feeling the best in these current conditions. There are many opportunities to trade, but there is not the level of confidence that I need to continually be bullish. I know that the markets can continually go up, and realistically will continue to move up, but I am not confident in the market’s ability to continue to hit new all-time highs. My portfolio is extremely light at this moment with the majority of the capital sitting in cash, and I am okay with that. I will allocate long when I see an opportunity to do so, but the large majority of the liquid capital I have will be consistently deployed via active day trading and scalping in these market conditions. I do not want to, nor would I recommend anyone attempt to allocate long into equities that are heavily overpriced at this point because realistically holding long equities in these conditions is overly risky. Yes, you may be able to capitalize on this momentum as you buy high and sell higher, but that is not a reliable strategy and increases your risk and exposure significantly.
This may sound like I am a broken record when saying this, as I have been saying it a lot recently, but tread lightly on these market conditions, and look to actively trade. There are great organizations to trade to attempt to follow the general market momentum, and simply just trade where you are both comfortable and confident. This in my opinion is going to be the best way to capitalize on the strength in the markets in the short term, without increasing your general exposure long term. It is difficult not having general exposure in the case that markets move up without you, but by trading and setting stops on your positions, you will decrease your downside risk significantly. The goal in the markets is profitability, but no one talks about longevity. If you lose your entire portfolio attempting to double it overnight, yes it may work, but realistically, you are putting too much on the line and all it would take is a simple sell-off to cause you to lose your portfolio. There is no longevity of your portfolio to trade another day if you simply do not have a portfolio remaining. Be smart, practice safe risk management, and limit your downside risk wherever possible, mostly in these current conditions.
For my allocations today, I do want to continue to be bullish in these conditions and trade towards the upside, but I will be primarily looking to follow the general market momentum. I want to scalp towards the upside, but attempt to short in the case market conditions display weakness. I do not want to fight the trend nor overallocate into the markets, but I want to find opportunities to realize gains in these conditions. The majority of my portfolio is in cash at the moment, so the only chance I have to see any real movement in the balance of the portfolio is to actively manage it in the short term. If I see any positions that I am comfortable and confident in, I’ll take the position and post them live in the HaiKhuu Discord.
HaiKhuu Proprietary Algorithm Report:
The performance of the last algorithm have been interesting. If you took EVERY single trade, allocated proportionally and held over the duration of the alert, you would have been down roughly 0.06%. This number is not too concerning, but if you went to maximize the allocation and allocated 100% of the capital available per trade, you would have been down approximately 5%. This is concerning, but the truth of the matter is allocating 100% of your capital into every position is hyper-unrealistic, and is not something that anyone is able to do.
With a simple adjustment of simply not opening positions within the first half hour of the day, the algorithm was up 9.85%, and if we adjusted another parameter if not holding positions overnight, the algorithm over the previous month of testing would have generated 24.11%.
The range of these allocations are extremely interesting, and this is simply a reminder that we advise utilizing these algorithmic alerts as a means of finding positions quickly in the short term that you may not have been watching, and to cherry pick the plays that you personally are comfortable and confident allocating into, versus blindly entering into allocations and praying that they work out.
It is obviously easy to see this all in hindsight, and as a result of that we can actively adjust the parameters for our trades to improve our allocations, and hopefully we are able to see more consistency with these positions over the next month.
The best of the previous month was going short $APTV on Jan 3rd, realizing a +5.14% return, and the worst play was an attempted long on $WBA, realizing a 2.15% loss. Regardless, we took an average of 45 positions per day, netting 1044 total positions, 505 long, and 539 short.
My Personal Watchlist:
Note, just because something is on my watchlist does not mean it is a signal to buy or sell any equities
Watchlist:
$SPY, $RIVN, $TSLA, $META, $AAPL, $NVDA, $AMZN, $AMD
LONG OPPORTUNITIES:
Long-Term Dividend - $GAIN / $JEPI
Long-Term Investment - $KO / $BA
Speculative Re-Entry - $DIS / $RIVN
Economic News for 02/05/2024
S&P Final U.S. Services PMI - 9:45 AM (ET)
ISM Services - 10:00 AM (ET)
Notable Earnings for 02/05/2024
Pre-Market Earnings:
Caterpillar (CAT)
McDonalds (MCD)
On Semiconductor (ON)
Estee Lauder Companies (EL)
Allegiant Travel Company (ALGT)
Tyson Foods (TSN)
Bowlero (BOWL)
Air Products & Chemicals (APD)
IDEXX Laboratories (IDXX)
Affiliated Managers Group (AMG)
After-Market Earnings:
Palantir Technologies (PLTR)
Symbotic (SYM)
Vertex Pharmaceuticals (VRTX)
NXP Semiconductors N.V. (NXPI)
Amkor Technology (AMKR)
Simon Property Group (SPG)
Chegg (CHGG)
Gladstone Corp (GLAD)
J&J Snack Foods (JJSF)
Crown Holdings (CCK)
Wrap up
This will be a fun week for the markets with many opportunities to trade. Be sure to practice safe risk management, and look to realize as many gains as possible. Conditions are still extremely strong and there is a lot of potential, but there are many risks that are involved with allocating long into the markets in these conditions. Be smart, be safe, and realize gains when you can. This will be a great time, so prepare accordingly, and let’s realize some gains!
Good luck trading, and let’s see what the markets have in store for us today!