June 3, 2020

Stocks – ZM, MCHP, AMZN

Macro – SPY, EWG, EWY

An interview I did with Seeking Alpha Yesterday

MIKE’S READING THE MARKET PREMIUM CONTENT $35/MONTH OR $300/YR– 

• The Long-Term Growth Outlook For Stocks May Take A Huge Hit 
• DEALERS HOLDING KEY LEVELS
• 3,100 Or Bust Is Closing In
• Drifting Higher Midday 6.1.20
• BIG DAY FOR STOCKS
• MANY KEY EVENTS THIS WEEK
• EPS Trends For 5.30.20

Well, here we are, with the most significant data points to come starting today and the rest of the week. I know, data doesn’t matter, fundamentals don’t matter, it is all about liquidity. Perhaps. Anyway, as a reminder, ADP jobs data comes at 8:15, and the ISM non-manufacturing reading comes at 10 am. 

KOSPI

The KOSPI was up big last night, and now the index is overbought with an RSI of 77, a pretty high level for an index. You have to go back to November 2017. It also happened to fill a giant gap that goes back to February 21. So, we will have to see what happens next here, but clearly, the likelihood of a pullback is climbing. 

Nikkei

The Nikkei also jumped, and its RSI hit 76, and what appears to be an “evening star,” perhaps a reversal pattern. Well, see, clearly, an overextended index too. 

The DAX also has an overbought RSI reaching of about 71. 

S&P 500 (SPY)

The S&P 500 is also very close to being overbought, so we can watch that today and see how the market responds to the data. Not sure that it will matter, for now, resistance remains in that 3080 to 3115 region. 

Amazon (AMZN)

Amazon plans to host a big sales event at the end of June, to “jump-start sales.” Sounds strange to you? It seems odd to me. I didn’t realize they needed to jump-start sales? Not sure what kind of message it sends. The stock has been consolidating since the middle of April, with RSI just grinding lower. Generally, that is bearish and would suggest the stocks falls. Support remains at $2285. 

Zoom (ZM)

I really can’t think of a more critical stock to watch today to get a feel for the mood of the market. Zoom reported powerful results and gave excellent guidance. This morning it has gotten a lot of price target bumps, but shares are up just 1.4%. It has been one of the most significant momentum stocks. A move lower today, I would take as a negative view, not only on ZM, but on the momentum trade. 

Microchip (MCHP)

Microchip is jumping after raising guidance for the quarter. Micron did this and hasn’t seen its stock rise much since. Microchip is jumping today, so it will be interesting to see if the gains last.

Good Luck Today, It should be interesting. 

-Mike

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