• US markets have a shortened trading week, but attention will remain on whether equities can continue their bounce

• The bounce/ bear market rally/ whatever you want to call it has caused some markets to move in a differentiated manner again, but will this last? 
  • QQQ is still looking bearish, even as SPY and IWM try to regain a bullish footing
  • XLP is bouncing up and down like a yo-yo, even as XLY continues to look very weak
  • XLI and XLF are still bouncing higher, although both remain in bearish channels

• Energy stocks (XLE) are still making new highs for the year, but with macro conditions deteriorating all over the world, how long can demand for oil remain at current levels?
  • XLU looks to be making a move to test its all time highs set in April

• Fixed Income ETFs are bouncing higher together, but remain in very bearish medium term trends
  • LQD, HYG, and EMB are either testing, or close to testing, key resistance levels
  • TLT is trying to find a bottom

Trading Ideas – Performance

Trading Ideas – Commentary

• Entered a straddle on XLU at a strike of 72, expiry Sep ‘22
  • Position will be profitable if XLU breaks out of its current 3 week old range

• Shorts in LQD and HYG stopped out as both spiked higher over the course of last week, for respective returns of 4.93% and 3.33% 

• Looking to enter short positions on pullbacks, possibly in:
  • IWM
  • EMB
  • EEM
  • LQD
  • HYG

Trading Ideas – Long

• A straddle on XLU is an increasingly interesting prospect 
  • Consolidating between critical support and all time highs, which way will it break?
    • Straddles are expensive, but will allow us to profit as long as the market makes a decisive break
    • With global macro conditions deteriorating, and energy prices remaining sky high, XLU will have to move in one direction or the other

Trading Ideas – Short

• IWM has broken out to the downside and remains vulnerable to further sell offs even as it bounces, given deteriorating macro conditions 
  • It is trading a fair distance away from the next major support level at 151.5, but it would be wise to wait for its short and medium term trends to realign 

• LQD, HYG, EMB
  • LQD, HYG, and EMB can still make a large move lower, possibly all the way to COVID 2020’s lows
  • All three are currently bouncing hard with the rest of the markets, it would be wise to wait for short term trends to realign with medium term bearishness

• EEM recently broke below its well established bearish channel, and is looking very weak even as it bounces

• EZU and FXI are also good short candidates, as their charts still look bearish
  • FXI is trickier to trade now as the Chinese government has verbally intervened once to halt the selloff in Chinese stocks