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Equity Markets are taking a wild ride today, with the S&P 500 down by nearly one percent at one point. But there has been a bit of snap back, with a recovery off the lows. Biotech just continues to get pounded, while Technology has had a rough go as well. Apple has managed to hold despite the weak day.
The SP 500 appears fine on the chart below with no significant technical damage. All the gaps have now been completely filled, while the index is finding support comfortable in its early October trading range. It is worth noting, a new downtrend line, drawn now in red. This is the first time that has been put in; the test will come around 2,560, which way the market will go.
The damage in Biotech is notable, and I have now drawn in a new dotted yellow support line around the $320 level in Nasdaq Biotech ETF ($IBB). It is a level we have not paid much attention to in the past, but we shall now.
Celgene reports results in the morning, and analysts are looking for revenue of $3.417 billion on EPS of $1.88. More critical will be the sale for Revlimid, it lead drug. Additionally, commentary around its pipeline or Ozanimod will be critical. It is hard to say the chart has found a bottom, but it seems a bit closer.
It took awhile, but the $XLK has now moved back into its trading channel, and that is good. Now some sideways consolidation would be nice. We can also see the gap has been filled from October 19.
Apple continues to hang tight, and while it hasn’t reversed course, it has broken down either. Apple is still the key to this market for now.
Amazon reports tomorrow after the close, consensus estimates are is calling for revenue $42.25 billion and a loss of $0.01. Revenue is the number that truely counts, in this case. The chart looks decent, and seems to have found support. It is a much-improved picture than one we were looking at Monday.
That’s all for today.
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Michael Kramer and the clients of Mott Capital own shares of CELG
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future.