October 2, 2020

STOCKS – AMZN, AAPL, FB, SHOP

Macro – SPY, QQQ, GLD

Mike’s Reading The Markets (RTM) Premium Content – NOW WITH A 2 WEEK FREE TRIAL 

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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAP

Stocks are falling on October 2 after President Trump and the First Lady tested positive for the Coronavirus.  Many changes may occur with this event, as we do not know how it will affect the election or, for that matter, national security. It sheds a new cloud of uncertainty on the market, which now needs to figure out how to discount it.  With the uncertainty of how the virus may affect the President’s health, one has to wonder if the market will have the resolve to go long into the weekend.

I’m not trying to diminish the health of the President, but this is a blog and commentary that is focused on the markets, and so the markets are what I shall remain focused on. We shall wish for a speedy recovery. 

S&P 500 (SPY) 

As a result, the S&P 500 futures are falling by 1.6% and are now dropping outside of and below the rising wedge pattern I first noted last night. For now, the futures are holding on to support around the 3,300 level. If that region breaks, it is likely to result in a further decline to roughly 3,200. There is little to no support between 3,300 and 3,200 at this point. Remember it was last Friday that the market rose sharply, erasing many support and resistance levels along the way.

Nasdaq 100 (QQQ)

The Qs are trading down by 2.1% and are also falling out of the wedge and holding on to support around the $277 level. A break of that level of support sends the Qs back to the gap at $272.50.

Gold (GLD)

Surprisingly there is no flight to safety in gold.

Apple (AAPL)

Apple is falling outside of the rising wedge this morning, with its next level of support at $110. A break of this level sets up a further drop to around $104. 

Amazon (AMZN)

Amazon is also falling outside of the wedge by a small margin. But if the stock were to break support at $3,100, it opens the door to a decline to around $2800 region again. 

Shopify (SHOP)

Shopify is dropping, falling out of its own wedge, with the next potential region of support around $1,050 and then $975.

Facebook (FB)

Facebook has a rising wedge of its own that it is falling out, and a giant gap to fill around $234.

The 1999/2020 Analogy?

Have a good one

-Mike

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 results.