February 2, 2021
STOCKS – BABA, AMZN, GOOGL, BA
MACRO – SPY, QQQ
- Earnings Preview: PayPal
- Midday Note: Stocks Are Filling Gaps As Implied Volatility Drops
- Morning Note: Fears Subside For Now
- Earnings Preview: Amazon
- Midday Note: An Uncertain Path Still Lies Ahead
- Morning Note: Volatility Appears To Be Spreading
- Earnings Preview: Alibaba May Fall In The Days Following Results
- T.W.A. – S&P 500 Breaks Major Trend Lines
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN GOOGL
Stocks jumped on February 2, with the S&P 500 climbing around 1.4%. It had been up more but pared some of those gains into the close to finish at 3,826. The index came really close to filling the gap at 3,848, rising to a high on the day of 3,843.
It seems like at this point, the gap is now filled, and now trying to figure out what is next is the tricky part. Because if the rising wedge pattern was truly broken, and the gap is now filled, then the index should reverse and move lower.
Nasdaq 100 (QQQ)
The Qs also filled the gap and reversed lower following the closure. Again, it is in the same position as the S&P.
The VIX has really fallen quickly, which has fuelled this big move up. If the VIX is going to fall further back to say 21 or 22, then the S&P 500 still has some higher to climb. As I noted in the midday note, the VIX collapse is similar to what we saw in November after the election. (Paid subscriber content – Midday Note: Stocks Are Filling Gaps As Implied Volatility Drops – get the first two weeks free to try.)
Amazon reported better than expected results, despite AWS missing estimates. Jeff Bezos will be moving away from the CEO role as well. What’s surprising is that stock is trading at the upper end of today’s trading range and not falling. I will look more closely later tonight. Amazon hasn’t been able to get above 3,360 for months, and today it managed to close above that price. Whether or not it holds will come squarely down to what the company says on the call. If it holds, perhaps the stock finally broke out of its trading range.
Alphabet is way up after reporting the blowout results all around. The stock clearly broke out of a flag pattern and avoided a reversal of a potential head and shoulders. If that is the case, it could head higher towards $2,170.
Alibaba reported better results, but they weren’t good enough, and the stock fell by around 4% today. The stock now finds itself on support around $256, with a break of support sending shares lower to $243.
Boeing is very close to making a big move higher if it can clear resistance around $205, triggering a break out of the bull and a push back to $239.
Have a good night.
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