Stocks Jump On October 7 But Fail Where It Mattered Most
Stocks rose on October 7 but the S&P 500 failed at 3,425 again.

Stocks Jump On October 7 But Fail Where It Mattered Most

October 7, 2020

STOCKS – AAPL, EXAS, AMD, ACAD

Macro – SPY

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Sorry for the technical issues this morning; a major problem took some time to resolve on the website. I think its fixed, but who knows. 

Anyway, the market is extremely confusing, with very little that seems to make sense on a day to day basis. We rallied pretty sharply on what seemed liked renewed hopes for a stimulus deal, but as far as I can tell, nothing has really changed from that perspective. I continue to believe a deal will not be had until after the election. So this is a risk for the market, unless the market is pricing in any deal getting done at any point in time. Which, to me, seems like it is impossible to guess. 

S&P 500 (SPY)

The S&P 500 rose by about 1.75% today, basically in the hope of a deal. Regardless, it managed to climb all the way back to 3,425 before giving back some of those gains. That level at 3,425 is significant. If it manages to climb above, we likely move sharply higher and fill that gap up at 3,560. In the meantime, a failure likely sends it lower towards 3,200. I’m still in the camp that the market is heading lower towards 3,200. The patterns seem to suggests that. 

Apple (AAPL)

Apple didn’t have a great day, rising back to resistance in that $116 zone, and just stopped. Again, based on the betting in the options market and such, I still believe this one goes lower. 

AMD (AMD)

AMD is still not out of the danger zone with the potential head and shoulders pattern a threat. It is going to take a drop below $75 to confirm the pattern. 

Acadia (ACAD)

Acadia is forming what almost appears to be a cup and handle pattern, which would suggest higher prices, which could allow a gap fill to $52.

Exact Sciences (EXAS)

Exact Sciences may be heading higher, too, with what looks like an inverse head and shoulders pattern. The next stop could be $115, with much higher prices after that. 

-Mike

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