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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June 12, 2020
STOCKS – LULU, NKLA, TWLO
MACRO – SPY, QQQ,
Mike Reading The Markets Premium Content – $35/Month or $300/Year
- MARKETS MELTS – BE CAREFUL
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- The Market Appears To Be Playing With Fire
- Bets The NASDAQ 100 Falls
- Starbucks Warns, May Be First Of Many
- Stock Remain Overbought SHORT-TERM Based On Indicators
S&P 500 (SPY)
Stocks were smashed today, no way around it. Once that 3,080 level was broken, it was over. The market flipped quickly. There is not much to say here except that the S&P 500 finished down about 6% an at the lows of the day. There was a close imbalance for a massive $4.4 billion today, and that pretty much sealed the deal.
The big question is what happens next. With all the carnage, it is hard to imagine tomorrow doesn’t unleash more pain because now you are going to have margin calls and such that will come into play if they haven’t started coming already. Couple that with it being a Friday, it could get ugly.
The uptrend off the March lows for the S&P 500 broke today, and that is never good. It means that the next level of support does not come until roughly 2,950. More concerning is whether this is merely a short-term event or start of something more severe.
The last time a significant uptrend like this was broken was back February, off the October rally. I’ll admit this is where things can be very tricky. The uptrend in the RSI was even broken and suggested a momentum shift may be underway.
Additionally, today had the feeling of a massive unwind, and next week is quadruple witching, it can get very tricky. I don’t like the odds of a rebound tomorrow, but we will see how the overnight session goes.
Nasdaq 100 (QQQ)
It was a bad day for the Qs too, with the ETF breaking the uptrend, and falling out of the rising wedge pattern. It managed to settle on support around $234. A break of $234 sends it sharply lower to $228. Again, RSI has a broken uptrend too.
The VIX had a huge day, rising by almost 50% to close at nearly 41! It could still go higher, especially if you get a move tomorrow that is greater than 2.5% on the S&P 500. We could be talking about ta rise back to 55.
Lululemon is getting crushed after hours; this is another example of investors having no clue what the future looks like. The company missed on earnings and missed on revenue. Then the company pulled guidance, but noted that it expects the fiscal second-quarter earnings to be worse than estimates, oops, and expected to have earnings return to growth not until the fourth quarter, double oops. But yet this stock has rallied 150% off its March lows and was 23% higher than its prior all-time high. Make so much sense. Why couldn’t this stock be back at $195?
I‘m curious to see what happens when Twilio breaks $181, that RSI is moving sharply lower now. Probably goes back to $122?
It didn’t take long for Nikola to fall to $57; I wonder if now it can go to $45?
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