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May 10, 2021
STOCKS – AMZN, JD, MU, FCX
MACRO – SPY, COPPER
- RTM Video – Capitulation?
- RTM MORNING – Reflation Trade May Be Running Out Of Room
- Measuring The Life Cycle Of The Reflation Trade
- MORNING NOTE- TOO MUCH OF A GOOD THING
- Is The Reflation Trade Ready To Deflation?
- RTM MORNING: WE ARE THIS CLOSE TO THE CLIFFS END
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.
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 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 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 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 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.
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