Stock Rip, Then Dip, In A Rapid Afternoon Reversal

This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.

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July 13, 2020

STOCKS – AMZN, NVDA, SQ

MACRO – SPY, QQQ

Mike Reading The Markets Premium Content – $35/Month or $300/Year

Stocks reversed lower today in a somewhat violent move, and if you were hoping for a breakout, you got it, and then it failed miserably. The NASDAQ 100 had been up by as much as 2% but managed to finish lower by about 2%, a nasty 4% intraday swing. Also, we finished at the lows of the days as well. Usually, that is not positive. Neither is the VIX being up all day, despite a big market rally.  The sell-off came around the time it was announced California was shutting down indoor activities. 

Now tomorrow starts earnings seasons in a big way. It may get interesting here.

NASDAQ (QQQ) 

So what happens next? I tend to think the Nasdaq is still overbought by a lot and that it needs to fall to the other side of the trading range. What happens after, we will find out when we get there. There is still a considerable distance the QQQ could fall from here. The first level I would look for is at $251, and then after that somewhere around $247.  It would be about 5% from the closing price Monday. Premium content – NASDAQ IS RIPE FOR A SIZEABLE DROP – WEEK AHEAD

S&P 500 (SPY)

Meanwhile, I would think the next meaningful level for the S&P 500 would come around 3,115. The index pretty much failed at resistance around 3,230, which also happened to be the prior high in June. Now we have to worry about the potential for a double top pattern, but we have some time to worry.  Premium content – Gap Higher, Then Fill? – Morning Commentary

VIX

Meanwhile, the VIX jumped by 18% to move back above 30. 

10-Year

The 10-Year is once again moving lower and is at a critical spot. If the 10-year keeps drifting, we could see it back 55 basis points, and that is not good for equities. 

Amazon (AMZN)

Amazon broke its little uptrend, and that could suggest the share dip back to $2,900, potentially even $2,700. 

amzn

Square (SQ)

Square fell sharply today, and the stock can’t afford to drop below $118; if it does, it likely means it retraces back to $103. 

Nvidia (NVDA)

Nvidia finished the day in a precarious spot; it most certainly doesn’t want to go below $400. If so, the next stop is at $380, and completion of the rising wedge pattern.  Premium content – Bearish Betting Persist For NVIDIA

Free content- Nvidia’s Soaring Stock May See A Big Reversal

Ok, let’s see the morning brings. 

Mike

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