Stocks Are Smashed On June 11, And There May Be More Pain Ahead
The stock market was smashed falling by 6% on June 11, the problem is, there may be more trouble ahead.

Stocks Are Smashed On June 11, And There May Be More Pain Ahead

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.

Otherwise, enjoy the column!

Subscribe to the Monster Stock Market Commentary to get the Weekly Monster Market Commentary and join the 3,342 subscribers getting it for FREE!

The Daily Commentary has moved as of December 1, 2022

June 12, 2020



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

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 (LULU)

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?


Twilio (TWLO)

I‘m curious to see what happens when Twilio breaks $181, that RSI is moving sharply lower now. Probably goes back to $122?


Nikola (NKLA)

It didn’t take long for Nikola to fall to $57; I wonder if now it can go to $45?


that’s it


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.