July 27, 2020

Stocks  – REGN, ILMN, AMZN, SGEN, VRTX, AAPL

Macro – SPY, GLD, IEF, FXE, FXY

Mike’s Reading The Markets (RTM) Premium Content – $35/Month or $300/Year

• It’s All About The Risk-On Trade – The Look At The Week Ahead
• EPS Trends May Be Stabilizing, Positive For Long-Term View On Stocks
• How Low Can Markets Go If The Uptrends Break
• Trends Suggest Lower Prices Lie Ahead – Midday
• Bears Circling In On Apple
• Uptrends Breaking Signal Bearish Turn
• The Momentum Trade Is Breaking
• Morning Write-Up
• AMD Breakout, Markets Holding – Midday

MICHAEL KRAMER OWNS XBI PUTS

MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL

Stocks are rising this morning, and for now, it is looking good. I just wonder if it can last. The S&P 500 ETF, SPY, is up 35 basis points, while the QQQ ETF is up about 70 basis points. But yields and the dollar are falling, and the gold is rising. These aren’t typically bullish signals, not to mention Tencent was weaker again overnight in HK.  (Mike’s RTM Premium Content – It’s All About The Risk-On Trade – The Look At The Week Ahead)

Euro (FXE)

The EURO is at a massive level, as well as the YEN. The chart below shows that euro is on the cusp of a significant breakout. This chart goes back to the year 2000, and either the euro is about to go lower to the other end of the triangle at 1.08, or it about to break out of a 20-year trading pattern. A move above 1.18, sends the euro quickly to 1.20 and possibly to 1.24 to the dollar. 

Yen (FXY)

Meanwhile, the yen is strengthen against the dollar, to its strongest level since March. 

Gold (GLD)

The weaker dollar is helping to send gold prices higher to a record high. The RSI on gold is way overbought, so it doesn’t necessarily signal a pullback yet, but perhaps the advance either slows or consolidates sideways. 

Copper

Meanwhile, the significant risk-on trade in copper is flat on the day despite the big break down in the dollar. We can see that the considerable uptrend in copper is now shattered. 

10-Year (IEF)

Meanwhile, the 10-year continues to move closer to breaking below 55 bps. 

Inflation or Fear?

Again, the big move higher in gold and silver, should not be confused with worries over inflation. It is part of a fear trade. We are not seeing metals such as nickel, copper, zinc, iron-ore, platinum, palladium moving up at the same velocity, or to the same record levels. These are the significant industrial metals. They tell you more about inflation than gold and silver.  I studied this topic in great detail the last time we went through this in 2009 and 2010. 

Tencent (700HK)

Meanwhile, Tencent, 700HK, fell overnight, after starting the day higher. The stock is very close to breaking down in a big way. 

Amazon (AMZN)

Why do we care about Tencent? Because as Tencent goes, so too does Amazon. Again, this speaks to tech-based global trade; it is not just a US-based trade. 

Apple (AAPL)

Apple will be the most critical stock to watch today, as the stock broke the significant uptrend last week, and if the global market is selling big tech right now, then Apple may be a victim. Apple will very much tell us what the mood of the market is when regular trading resumes. 

Regeneron (REGN)

Regeneron is one of the big biotech stocks that need to be watched. The stock broke an uptrend last week and could hold a clue for the direction of the group.  The RSI is clearly pointing lower. 

Vertex (VRTX)

Meanwhile, Vertex is very close to breaking a significant uptrend as well. 

Illumina (ILMN)

Meanwhile, Illumina finds itself in the same spot. 

Seattle Genetics (SGEN)

As is Seattle Genetics. 

-Mike

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