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May 31, 2020
Stocks – AAPL, DOCU, AVGO, ZM
Macro – SPY
MIKE’S READING THE MARKET PREMIUM CONTENT $35/MONTH OR $300/YR–
- Dealers Still Supporting The Market
- A Busy Next Week Starts Today
- Thinking About Where Stocks Go Next
- Nearing A Major Turning Point -Midday
- Options Bet Indicate Apple May Drop Soon
The “V”, “U”, and “L” Shaped Recovery Scenarios
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL
It is likely to be a hectic week, with a lot of economic data starting Monday morning and running right through Friday. It will be potentially market-moving data, and based on regional Federal Reserve bank reports and trends in initial claims; I don’t expect any of it too be good. We are entering a week where we could see the market go either way based on the data, and more importantly, how the market interprets the data and what it potentially means.
The newsflow starts on Sunday night, May 31, with China PMI data, and that will be followed by the ISM manufacturing report on Monday morning. Then on Wednesday will be the ISM non-manufacturing report along with the ADP job report. Thursday will be an ECB rate decision, along with initial jobless claims. Then on Friday, we will get the BLS Jobs report; it is expected that another 7.7 million people lost their jobs through the middle of May and that the unemployment rate went up to 19.8%.
Mostly regional data up until this point has suggested a very mild improvement in May versus April. The data in some regions of the country is now a little bit worse than or on pare with the recession of 2008 and 2009. In many cases, April saw the worst readings on record. So an improvement, yes, but the numbers were all still pretty horrible. An ISM Manufacturing report equal to the depths of 2008 would be around 34.5, analysts are looking for 43 versus last month’s 41.5.
S&P 500 (SPY)
The S&P 500 has been rising in a channel since the March lows, and the RSI still has some further to rise until it hits the next level of resistance around 3,115.
I will be watching Apple closely this week. Last week, I saw some bearish options betting taking place in the stock, as it continues to test an uptrend. As long as the uptrend continues to hold, then the shares can push higher to $328. If not, then the $295 to $300 range seems like the next stop. PREMIUM CONTENT – Options Bet Indicate Apple May Drop Soon
Broadcom will report results on June 4, and this will give us an intra-quarter peak into the semiconductor business. There is a gap that needs to be filled around $300.
Zoom will report results on June 2, and there is a clear bearish divergence which formed in the technical chart, and the stock has hit resistance at $179. There is also a bump and run, another bearish pattern. There seems to be a good chance shares move down to $160.
Also, DocuSign will be reporting on June 4, and I get the whole idea about growth prospects. But this stock trades for 121 times 2023 earnings estimates, 13.9 times 2023 sales estimates. The stock has managed to hit a new high, and the RSI has not, that is also a bearish divergence pattern. A break of the uptrend sends the stock back to $115.
That will be all, good luck this week
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