From Polar park. Luckily there is a solid fence between us and the bear

Stocks Drop On May 10 As Amazon Reaches Death Cross

May 10, 2021

STOCKS – AMZN, JD, MU, FCX

MACRO – SPY, COPPER

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Stocks had a very lopsided day, with the S&P 500 dropping by around 1%, while the NASDAQ fell by nearly 2.7%. The growth stocks got hit the hardest, while the reflation names had some big intra-reversal. Overall, today was not a pretty day, with many big reversals throughout, not just in stocks, with copper marking a big reversal lower.

For now, the 5-wave count I pointed out on Sunday stands and based on that, I would think the index could finally make that push back to 3,960 we spoke about a month ago.

Copper

The copper reversal was notable, especially after a big run-up. It is the type of price action you see at the end of a run higher. Copper has certainly had a big run higher, and drop back to $4.50 certainly doesn’t seem unlikely.

Freeport (FCX)

Freeport was one of the stocks that had a big reversal today after gapping higher. It left the stock trading below support at $43.60. Given the big reversal today, it would not be surprising in the least to see the stock reverse lower towards $39.

Amazon (AMZN)

Amazon comes to a crossroads as it approaches its 200-day moving average. This could be a big turning point for the stock, as a break of the 200-day moving average would certainly be a long-term momentum breaker. It has already tested this level once and survived; the question is if it can do it again? The only difference is that this time, the 50-day and the 200-day meet to form a death cross.

The selling has come on strong volume.

Micron (MU)

Micron was hit hard today, too, falling by almost 6%. The stock is probably now on its way to $74. I have been waiting for $74 for a while; maybe this time, it finally happens. The RSI says there is further to fall.

JD.com (JD)

JD.com has to hold support at $67.30 to avoid a bigger meltdown. The death cross is in play with the 50-day crossing over the 200-day.

-Mike

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