Stocks caught a late bid as Tesla's shares ramped up by over 10% again to cross $1,500 per share for the first time.

Stocks Catch Late Day Bid As Tesla Soars

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July 10, 2020



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Stocks had a pretty blah week with the S&P 500, mostly finishing flat. It was a strange day because there wasn’t much going on around lunchtime, and the market caught an end of day bid. Perhaps there was some short-covering going into the close, maybe. Indeed not the usual trend. I noticed the market caught fire around the time that Tesla broke out this afternoon, and perhaps that ignited the risk-on momentum algos and ETFs. There was no reason for the rally otherwise.

There were a few positive remdesivir comments this morning. But the market doesn’t care about the coronavirus anymore anyway.

S&P 500 (SPY)

I find myself confused at the moment regarding the S&P 500 and what happens next. There is a downtrend in place, and that has limited the market’s advance since the beginning of June. But there is a pattern that resembles a bullish flag pattern. If that is the case, then the market will rally sharply to around 3,240. Unfortunately, the way the market went out today it leaves me guessing as to what happens next. It could very well be that the next short-term move for the S&P 500 is higher.


The NASDAQ has gone parabolic versus the S&P 500, and it is now valued at its highest level versus the SPY, ever!

Financial (XLF)

The financials ran up today, ahead of some significant earnings next week. If the S&P 500 can get the bank’s stocks working in its favor, then the next level to watch for could very well be around that 3,230 level. The XLF got back to $23.60, which has been a problematic level since the middle of June.

Tesla (TSLA)

Believe it or not, Tesla may have been responsible for dragging the entire market up today. The stock has a 2.5% weighting in the QQQ’s, and it was up 10% on the day. You can see that as Tesla broke out, it eventually led to the Qs moving up. Once, the Qs started moving up, it took everything else with it, because that how ETF’s work.

PayPal (PYPL)

PayPal has seen its RSI just go nowhere despite a stock that has been rising. Man, I wouldn’t want to be near this thing when that gap gets filled.

Visa/Mastercard (V, MA)

Again, I can’t understand why we haven’t seen the same optimism for Visa and Mastercard that we have seen for PayPal or Square, makes zero sense.

Mastercard (MA)

The chart for Mastercard doesn’t even look that strong, which is just bizarre. Since everyone is buying stuff on Amazon, shouldn’t Mastercard be performing much better? It looks like it about to go to $272.

Visa (V)

Meanwhile, Visa could easily slip to $181.

What do I know…

Have a good weekend.


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