October 4, 2020
STOCKS – AAPL, AMZN, FB, GOOGL, PYPL
Macro – SPY, QQQ
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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL
Stocks were up last week but made little headway after Monday’s gap higher. Stimulus talk managed to keep things afloat, but then weakness began to re-enter the markets by Friday after the S&P 500 rejected Thursday’s break out attempt, moving back below the 50-day moving average.
S&P 500 (SPY)
But more importantly, a bearish pattern has formed across the S&P 500 and a number of the leading stocks in the market. The S&P 500 appears to have developed a bear flag/pennant. This negative continuation pattern, suggesting the index is likely to take a leg lower this week, with the critical level to watch for coming at 3,200. (Premium content – get the first 2 weeks free – 5 Themes For The Week Of October 5)
NASDAQ 100 (QQQ)
The Nasdaq 100 also formed a bearish rising wedge pattern last week, dropping out on Friday. It would suggest we see lower prices this week, heading towards $265.
Apple is just one of those stocks that seem to reflect that same bearish pattern. Meanwhile, a drop below support at $110.50 is likely to lead to a decline to $104.
Amazon is exhibiting that same pattern, with a drop below resistance at $3,100, leading to a decline to around $2,870.
The same pattern also exists on Facebook, with the potential for the shares to fall to around $241.
The same pattern also exists in Alphabet, with the potential to fall to around $1,360.
The same pattern is also present in PayPal with the chance to decline to around $171.
I guess you get the point. The same pattern is in a lot of places.
We should get a good sense of things on Sunday night once the futures open. Good Luck, everyone!
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