HaiKhuu Daily Report - 08/05/2024
Uh…. wow. The markets are looking absolutely disgusting, and this is what we have all been warned about. I hope you are ready because this is going to be one hell of a tumble. Good morning, and happy Monday. It is raining in Chicago, and the markets are setting up for a terrible time. Japan’s Nikkei dropped 12% and just had its worst day since the 1987 Black Monday crash, Bitcoin just dropped 16% in the previous day, and we are starting to see initial signals of a recession starting to form.
Is this ideal in any way, shape, or form? Not at all, but I will say that by the time we start to see signs of a recession starting to form, thankfully, we are on the back half of the beast.
This will be an extremely interesting time for the markets as everyone is in both a state of confusion and a state of panic. Please continue to tread lightly and practice safe risk management in the process. Many traders are going to wipe out in these market conditions, but anyone who’s been holding cash, practicing safe risk management, and hedging their positions should have no problem at all. I’ll talk more about this later on in the report, but please just continue to tread lightly in these conditions.
There are many major economic events and earnings happening this week. Prepare accordingly and check everything out HERE!
Good luck trading, and let’s see where the markets go by open.
The updated $SPY daily levels are as follows:
Conversion Line Resistance: $546.88
Baseline Resistance: $542.67
Psychological Support: $500
Daily Cloud Resistance: $539.61
$SPY Daily Candles - [08/02/2024]
Thoughts & Comments from Last Week
Last week was a bloody week for the overall markets, dropping significantly in the process. Traders had an extremely difficult time actively trading as there was weak momentum, and it was extremely difficult to attempt to catch a pop in the markets. It was a tough time for the large majority of traders and worst for investors, as this has been holding mega-cap organizations like $NVDA, $TSLA, and $AMZN. Opportunities will continue to present themselves, but it is just a matter of time.
We started last week with $SPY opening at $546.22 and looking relatively strong. Conditions were not perfect, but thankfully we were able to continually maintain that level throughout Monday, and only started to see some slightly bearish momentum leading into Tuesday. On Tuesday, $SPY quickly dropped to hit $540 but thankfully bounced from there, and we watched as $SPY displayed strength on Wednesday, breaking out back above the daily baseline resistance on the daily, giving traders a glimpse of hope before the uncertainty. We ended Wednesday with $SPY trading at $550.81, slightly below the daily baseline support.
Thursday was when market conditions started to become rough, and people started to panic heavily in the process. $SPY opened on Wednesday looking beautiful, opening at $552.57, and rallied to the official high of the week, trading at $554.87. Conditions were looking good as we were starting to see a sign of a reversal from the “bottom” bouncing off of the cloud, making it back above the daily baseline resistance before starting to come back down, and as the markets started to come down, it only continued to snowball. Everyone started to panic, and the panic caused continued selling as $SPY continued to drop, making the official low of the day bouncing off the daily cloud support, trading at $539.43. $SPY did recover slightly on Thursday, closing the day trading at $543.01, but that is not significant as conditions only continued to scare traders, and Friday wasn’t much better.
On Friday, we were met with instant bearish momentum as $SPY dumped heavily, gapping down on the daily, opening the day trading at $535.58. The situation only continued to get worse and worse throughout the day. The markets continued to sell off, and $SPY made the official low of the day early in the morning, trading at $528.61. Conditions were not great, but it provided traders with some phenomenal opportunities to attempt to trade the dip in the markets as we were able to recover slightly from the bottom, where we officially ended the week trading at $532.90, down $10 for the day on Friday, or down $13 from open on Monday.
The movement we saw in the markets last week was ruthless and, honestly, was one of the worst weeks we’ve seen in the markets in the short term, but thankfully, opportunities were consistently amongst us during that time to navigate accordingly. Hopefully, you all have listened to our warnings, had bearish exposure and hedges on your accounts, and have been holding cash, because this in my opinion is going to be an amazing dip buying opportunity, it is just a matter of not if, but when the reversal happens. Continue to tread lightly and prepare accordingly for this week.
S&P 500 Heat Map - 08/02/2024
Thoughts & Comments for Today - 08/05/2024
Today is going to be a rough time for the markets, and many people will unfortunately be wiped out in the process.
As a wise man once said, “Do you know what’s worth fightin’ for?” - Source
The right answer? Financial solvency and longevity in the markets. These market conditions have been rough, and I know that I am talking to a lot of people when I say this. Market conditions are tough right now, but this is just a part of being in the market. Once you’ve had enough general market exposure, where you’ve seen drops in the markets, market conditions like this don’t really phase you anymore. If this is your first time seeing some serious bearish momentum in the markets, congratulations. This may be the first time you’ve seen it, but this is not going to be your last.
If you have been having a tough time in the markets over the previous couple of weeks, this is the time for you to contemplate your strategy on how to navigate these market conditions and start to do what you can to adjust your strategy to minimize the amount of risks that you are taking. For anyone who has been trading short expiration option contracts, I apologize as that must be tough to attempt to trade with both comfort and confidence, but at the same time, opportunities are genuinely amongst us to continue to capitalize on these conditions. Look to adjust to safer strategies, pick up shares instead of contracts, and minimize your risk, as in the worst-case scenario with shares, you simply just continue to hold and allocate accordingly in the process.
I will say, as bad as this sounds, only the inexperienced traders who haven’t seen much downside are the ones who are genuinely panicking about these market conditions. Anyone with experience who has been through this before knows that on the other side of the tunnel, conditions become a lot better, and opportunities genuinely become amongst us at that point. Is that going to be true for every trader out there? No, but I will say with confidence that the majority of fear that is being generated in the markets right now are traders who simply have not had the amount of exposure necessary to know how to navigate these conditions or the individuals who are overleveraged into the markets, making it extremely difficult to recover in the process. As long as you practice safe risk management and are doing what you can to minimize the losses that are being generated in these market conditions, there is genuinely zero reason why you should be worrying too much. The smart money is starting to foam at the mouth waiting to allocate long into the markets at the moment.
This, in my opinion, is going to be an amazing opportunity to pick up equities for the long haul. The question is when will the reversal come, and which equities should you look into, in my opinion, anything can realistically happen, but there are certain organizations I would prefer to allocate into and to actively trade where possible. My primary target to be looking into is semiconductors. They are starting to come back into fair value territory, and once the markets start to show signs of a reversal from the bottom, then, in my opinion, they will outperform the rest of the markets.
Just be careful attempting to buy this dip too soon, as many people are going to be panicking, and as people are panicking, organizations become heavily oversold and, as a result, are undervalued, providing us with an amazing opportunity to buy the dip. The question is, where is the bottom, and when should we start to buy again? This is not a matter of IF but a matter of WHEN. So, prepare to allocate a long time to the markets, and let’s try to make the most out of these market conditions. Life moves on, and so do the markets, so let’s have a lot of fun in the process and make the most out of these conditions.
If I see any opportunities, or if I decide to get into any other plays, I’ll announce what I see in the HaiKhuu Discord.
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, $NVDA, $TSLA, $INTC, $AMD, $MSFT, $TSLA, $META, $GOOG/L
LONG OPPORTUNITIES:
Long-Term Dividend - $GAIN / $JEPI
Long-Term Investment - $INTC
Economic News for 08/05/2024 (ET):
S&P Composite & Services PMI - 9:45 AM
CB Employment Trends Index - 10:00 AM
ISM Non-Manufacturing PMI - 10:00 AM
Notable Earnings for 08/05/2024
Pre-Market Earnings:
Krystal Biotech (KRYS)
Freshpet (FRPT)
Alpha Metallurgical Resources (AMR)
Tyson Foods (TSN)
Carlyle Group (CG)
Kosmos Energy (KOS)
Sonic Automotive (SAH)
Sohu.com (SOHU)
TreeHouse Foods (THS)
Medicis Pharmaceutical (MRX)
After-Market Earnings:
Palantir Technologies (PLTR)
Hims & Hers Health (HIMS)
Lucid Group (LCID)
Realty Income (O)
Avis Budget Corp (CAR)
Clover Health (CLOV)
CSX (CSX)
ZoomInfo Technologies (ZI)
Simon Property Group (SPG)
Yum China Holdings (YUMC)
Wrap up
This is going to be an insane day for the markets, and this is going to be an insane week in general. Please continue to tread lightly, practice safe risk management, and protect your bottom line. Many traders are going to drown in the process, so it is just a matter of remaining solvent while the markets are irrational to take advantage of the heavy discounts that will be presented to us in these conditions. Don’t buy too early, and wait for a sign of reversal. If the markets have you upset, life moves on, and make the most out of these conditions.
Good luck trading, and let’s see where the markets decide to take us today!