September 14, 2020
STOCKS – NVDA, MU, AMZN, ORCL
Macro – SPY, QQQ
- A Downtrend Is Born
- Gap Higher, Fill Lower? Morning
- 9 Themes For The Week Of September 14
- Sell-Off Has Much Further To Go
- My Portfolio Breakdown -Entry Spots
- When Adjusting For Growth The S&P 500 Is It Most Expensive In 40 Years
S&P 500 (SPY)
Stocks were mostly higher today, but the rally ran out juice around lunch, and it was more about maintaining the gains, then adding on to them. The S&P 500 finished the day higher by around 1.2%. But it seems there is now a downtrend that has formed in the index. If that is the case, then today’s rally should vanish rather quickly tomorrow, with a fill of the gap from Friday to 3,340. (Premium content – A Downtrend Is Born)
Meanwhile, the Qs have the same kind of pattern with the lower trend line, with the potential to refill the gap at $270.
How the rest of the week goes will mainly be dependant upon the Fed on Wednesday and Quadruple witching on Friday. Call volume was down again, despite the stronger day for stocks. Put volume was weaker too, but that is to be expected on a stronger day.
Call volume was the weakest since the middle of August. The weaker call volumes could be one reason why it feels like some of the thrust in the market isn’t there. The dealers don’t have to hedge as much stock.
It was also a weaker day for Amazon despite the significant market gains. The stock opened higher and filled the gap by days end, finishing around support at $3,100. That support level continues to be a battleground for Amazon, with a break of support triggering a decline to around $2,800.
Nvidia gapped, higher, and I don’t expect it to last after investors have time to digest the ARM deal. Nvidia paid a lot for ARM, at nearly 20 times sales, and the deal is dilutive to shareholders, with Nvidia pay a large portion in stock.
Micron rallied today following that upgrade but couldn’t quite get past resistance around $49.80. My immediate reaction is that the stock works to fill that gap lower.
Oracle is hitting up against resistance around $61, with a potential break out sending the stock higher to $66. I noted some bullish betting suggesting the stock continue to rise, even though it is the preferred technology provider to TikTok in the US, whatever that means, and not the owner of TikTok. Oracle’s Stock May Have Even Further To Climb
Have a good one!
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