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Stocks – NVDA, ACAD, HD, PYPL
Macro – SPY
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Stocks fell on November 12, with the S&P 500 declining by 1%, finishing off of its lows. Meanwhile, the Qs finished the day lower by about 50 bps.
There was nothing special about today, just some more grinding in the indexes giving up all of the vaccine gains on Monday. I tend to think that the market is either in a holding pattern in a range of 3,200 to 3,600 or that we have downside risk going into year-end. I don’t think the setup is all that favorable. Especially with COVID cases rises, modified stay at home order being put in place, and no stimulus coming.
I hate to say it, but the best way for the market to get a stimulus deal down is to force our politicians’ hands, which means some volatility lower. It seems to be the most effective way for the market to get what it wants. I’m not saying the situation warrants such an extreme at this point, but it could sometime soon.
In the morning write-ups, I have noted some huge options bets have been placed on the SPY and QQQ ETF’s suggesting lower prices lie ahead.
S&P 500 (SPY)
For now, the S&P 500 is holding support at the green downtrend I have drawn in. If that breaks, then I think we will see a move lower back to 3,270, filling all the gaps that have been left unfilled from last week.
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Nvidia (NVDA)
Nvidia finished the day flat, but notice how it rose to the trendline and turned lower off of it. Not the most bullish sign, suggesting the uptrend is dead, and the next turn is towards $460.
Acadia (ACAD)
Acadia is climbing nicely, and the company continues to impress. The opportunities are huge if it can get that approval from the FDA in dementia-related psychosis. The gap is nearly filled at $56.
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PayPal (PYPL)
PayPal doesn’t look particularly appealing these days. The stock has some double top pattern going on. Meanwhile, the RSI is trending lower, indicating that the shares are likely to fall to around $172.
Home Depot (HD)
Home Depot has gone nowhere since August, and the RSI tells us it will continue to go sideways or lower. Higher isn’t in the cards until there is a reversal of momentum.
-Mike
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