Stocks Finish Higher, As Software Sector Starts To Fall Apart

This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.

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July 14, 2020

STOCKS – ADBE, PYPL, DDOG, WDAY, SPLK

MACRO – SPY, QQQ

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It was a fantastic trading day, with the QQQ whipping like a flag on a windy day. The day closed with a massive $4 billion buy imbalance that drove equities higher in the final 10 minutes. Not many changes from the perspective of the NASDAQ 100 ETF, with the QQQs, up about 70 basis points, the ETF managed to fall to around $252, which completed a gap fill from July 2.  Whether that ends the sell-off or not, it is impossible to know for sure. But I still think the sell-off is not complete until we reach the lower bound of the trading channel, and that is around $247. 

Workday (WDAY)

Some of these software stocks have seen real damage. Workday drop below an uptrend that has been rising against since March. The stock could be on its way lower to $169.

Splunk (SPLK)

Splunk also broke an uptrend, and that could indicate a decline to $170, is coming. 

Datadog (DDOG)

Datadog also broke an uptrend, maybe with a push down to $80. 

PayPal (PYPL)

PayPal, you can read more here in this free story. Free Content – Momentum In PayPal Stock Is Quickly Shifting

Adobe (ADBE)

Adobe came close…

It isn’t a coincidence this happened because these all move together, but I’m not sure what it means. It could be the start of a broader sell-off in the group, and thus the Qs. Or it could merely be a one day glitch and we resume the uptrend tomorrow.

I would tend to think it is not a glitch and that it is the sign of a broader sell-off, but only time will tell, and I will continue to watch these names closely, as you should too.

-Mike

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