1/13 Best Idea For The Week Ahead

We closed with out 10th green week in 11 tries on the SPY, the strength we’re seeing is remarkable, we haven’t even tested the 8 ema weekly in 10 weeks. With earnings season just getting underway, you have to think we see continued strength up into the prints of the mega caps, if those go poorly, then we can talk about lower, but for the time being, it is hard to be bearish with this market structure. Of course there is the situation in Yemen unfolding where we bombed them again last night and who knows what that escalates into. I know many are getting bearish, but I prefer to wait for some confirmation of weakness first and that would start with a weekly close below the 8 week.

Today I have a $40B company with a pretty powerful chart setup that could be setting up for that next leg up. The options flow for the past 2 months has been all bullish, the power earnings gap hasn’t filled, and most analyst targets are much higher than it currently sits. I’m going to detail my thoughts below plus explain how I’d use a ratio to play the name for those looking for big upside over the next year but I also have a simple trade you can put on targeting a 33% return over the next 12 months for those who want a more conservative trade.