4/18/22

STOCKS –  ARKK, DIS, HD, ADBE, ZM

MACRO – SPY, IEF, LQD

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• RTM: Rallies Should Be Short-Lived (Daily Update)
• RTM Exclusive: Banks Set A Negative Tone To Earnings Season
• RTM Tactical Update: The Fed Will Drain The Stock Market Of Excess Liquidity
• RTM Exclusive: Betting JPMorgan’s Decline Aren’t Over [Short-Term Options Idea]
• RTM Exclusive: Walmart Shares May Pullback Amid Weak Consumer (Short-Term Option Idea)

The S&P 500 finished the day lower by one bps, and the NASDAQ QQQ ETF finished higher by eight bps. It could have been worse, with the index rallying sharply in the final 10 minutes of the day with the S&P 500 climbing by 50 bps. Whatever selling that was pressuring stocks into the close decreased in those last 10-minutes. Perhaps there was one prominent seller, and we will need to see if the seller shows back up tomorrow or not.

Financial Conditions (IEF, LQD)

The IEF/LQD ratio was higher today, suggesting that financial conditions are tightening again. This is important to watch should they continue to move higher. The tighter the conditions get, the worse it will be for stocks, and the fact of the matter is that conditions should tighten further since that is what the Fed’s intention is.

Adobe (ADBE)

Adobe shares have stalled out and are now still sitting at $425. This has really been the critical level of support for Adobe, and to this point it has held each time. We just need to wait and see what will happen. But this is a significant level, and should it the stock break down; it would be a terrible sign.

ARKK (ARKK)

The ARKK ETF fell today below support at $58.50, which probably puts the ETF on a path to drop to around $54.50.

Disney (DIS)

Disney is in a similar spot as Adobe, with the stock very close to breaking a very significant level of support at $127.75. Once that level breaks, nothing keeps the stock from going back to $117.

Home Depot (HD)

Home Depot also finds itself on crucial support at $300, and like the others, there is not a lot holding the stock up from falling back to $285.

Zoom (ZM)

Zoom is also sitting in the same spot, as the others, on support.

These are all sitting on key support levels, and we can see how weak they look, and if they break, it is not a positive for stocks overall. It implies just how fragile the market is here and how little it may take to break it down to the downside.

-Mike