Tackle Today: FAANGs can pierce your skin
October 19, 2018
≈ Large Cap Tech Stocks ≈
The bull market has been chugging along for almost 10 years. During the run, we’ve seen fantastic gains our of the market leadership from large cap technology stocks. Some of the most watched, and traded, have been the likes of Facebook, Amazon, Apple, Netflix and Google. This group has been affectionately called the FAANG stocks.
FAANG stocks are not in good shape on their daily charts. Facebook has had a sharp downtrend since earnings in July. Amazon has put in a lower pivot high for the first time in a while. Apple has lost momentum in its trend. Netflix reported strong earnings, and then traded back into the middle of a long-term range. Google has been down trending for 3 months, since their positive earnings report in July.
What will happen to this market if the bells of the ball continue to show weakness? Can these stocks break and run to the upside, creating a bullish condition again? The answer to those questions will most likely be answered over the next few weeks, as we are waiting for earnings results from FB (10/30), AMZN (10/25), AAPL (11/1) and GOOGL (10/25).
The results, and relative leadership, or weakness, from these companies very well might set the market trends from now until the end of the year. There are many things at play, and 5 companies aren’t everything. But, if you look at a heat map, they are a lot. The total market cap of these FAANG stocks alone is daunting and has exceeded $3 Trillion this year. Keep an eye on these stocks, their earnings, and their charts. Whether you trade them or not, is not important. They have become market indicators and critical to watch if you’re trading stocks.
Chart of the Day
THE BIG TECH
FB, AMZN, AAPL, NFLX, GOOGL on their daily charts.
Video of the Day
How to read Candlestick Chart Basics Tutorial
Coach Tim Justice quickly explains how to effectively read a candlestick chart.
Today’s Lineup
OPTIONS THEORY
What is Beta Weighting?
Beta weighting allows you to modify the delta of all your positions to a single underlying. I think of it as the common denominator. It is necessary to do this if you want to measure the overall risk or directional exposure of your portfolio BECAUSE you can’t add the deltas of different stocks. For example, if you have +25 delta on AAPL and +30 delta on MSFT, then ThinkorSwim will say your total delta is +55 for the portfolio.
Coaches Lounge 11am EST
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Cashflow Club Replay
If you missed last night’s episode where Coach Grant talked about cash flow strategies or would like to watch it again, check it out here.
Halftime Report 12:30pm EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.
Market Recap 4:30pm EST
The Market Recap is designed to give you a quick overview of the day that was. While brief, this report is designed to cover all of the major events that drove the markets that day and help you plan for the trading day ahead.
