Dire Straits
The Week Ahead 4/20/26
The Big Picture
We ended last week nearly 20% from the lows on the Nasdaq, officially wiping bear’s out and creating near euphoria across the market. I do believe it was a pain trade to see a move like that. However, now we are seeing call volumes spike and earnings season kick into high gear. CTA’s bought nearly 90B in equities over a week’s time, with more to come potentially. Historically these forced-buying episodes front-load returns; the question becomes whether organic demand steps in to sustain the move or we simply borrowed from future gains
I am watching for a continuation into 7200/7300 level after a brief pause, but expect 6600 gap fill area to filled by the end of the summer and possibly much sooner if big tech earnings fail to meet expectations. Iran news is something that seems to cause back and forth, without a doubt, but the longer you are in markets you find that the flow and technicals tell the story, they are the key thing to follow. It never is about what Washington, Banks, or Hedge funds are saying, its about what they are doing.
Netflix earnings topped off last week and saw nearly a 10% decline, oil sold off via ceasefire news, and Michael Burry mentioned “needle tops” which is always fun. But where does the market go after such a historic rally? Forward returns data signals a bullish bias is appropriate but I think its important to zoom out and take a 2nd level look at the data. Lets dive in.
The Rally of all Rallies
A true historic run in the index’s off the March low’s. On March 29th I shared my Q2 Outlook and wrote about the data supporting a strong rally. The rally that came was far stronger than I expected, nearly 17% in the Nasdaq.
The strong rallies are not uncommon to see in Mid Term Years, they can be very volatile and challenging to navigate. The key is these type of markets is often to avoid over leverage and short dated options, leaning into higher conviction setups and avoiding overtrading a volatile market.
Seasonal Context: Q2-Q3 Historically weak in Mid Term Years, this recent rally follows the map well, we rally to start before rolling back over into the summer.
The broader question, the entire world wants energy lower, and I think that’s ultimately the path it takes. But will cheaper oil be enough to keep the U.S. economy afloat as we move deeper into a Mid Term year?
Key Watchouts: Iran escalation and that impact on oil and the dollar could negatively impact markets in the short term but earnings are going to be what matters here soon, NFLX earnings have already disappointed but banks actually reported strong data for the consumer with very little loans > 90 days in delinquency.
Earnings: Key watchouts for me this week are Tesla, Intel, ServiceNow, and Blackstone.
Macro & Data Watch
Tuesday I’ll be keeping a eye on the future Fed Chair testifying, this could be a catalyst the market wants to react to in terms of rates. ( TLT / TNX )
Dark Pool and Volume Leader Signals
Lots of interesting prints ended the week. #1 Print all time for XLE stands out. The price has since declined under the print and then closed right at it on Friday.
The #1 all-time print in XLE, with price pulling back and closing right at the print level on Friday, combined with the current RSI read, sets up a strong argument for a bounce short term.
Stock and Sector Specifics
In this section I’ll give comments on a few pieces but mostly share forward returns for the weekly earnings names I’m watching. This worked well for Netflix last week.
INTC
Intel has earnings upcoming this week and is up nearly 50% in a span of just a few weeks. The #1 print came in on Friday for the 2x INTC ETF. Since 2020, the Forward Returns haven’t been favorable to Intel when RSI gets this overbought.
BX
Blackstone with earnings this week, watching for a rejection off the weekly 20SMA or a push to the 50SMA near 148.
TSLA
Tesla has picked up steam here and needs to hold above the 200D to push towards 417. I rally into 417 ahead of earnings might be a good take profit level. (Or Short Opportunity) The Mid Term Seasonality is not favorable for Elon here.
NOW
ServiceNow reports earnings this week, everyone should know by now I am extremely bullish long term on the name. If earnings reaction is strong its possible the 120’s are tested this week.
Final Thoughts
As I mentioned, the technicals and flow will be the guide here. This is not the zone to be leveraging up IMO but instead de-risking and planning ahead as volatility remains throughout the year. What levels are you buying at? What levels, if hit, are zones to take profit? When opportunity comes, will you be ready to take advantage?
As of now we are 20% off the lows, CTAs fully loaded, and have call volumes spiking.
Paul Tudor Jones said it best:
“The most important thing for me is that defense is 10 times more important than offense.” We're in the strait — watch the rocks, not the horizon.
I’ll be releasing my week ahead trade idea’s to paid subscribers on Monday, be sure to take advantage. Cheers!