July 22, 2020
Stocks – ACAD, AMZN, JD, FCX
Macro – QQQ, SPY,
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- AMD May Be Ready For A 10% Drop
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN ACAD
Stocks are drifting lower on July 22 as tensions between the US and China are on the front page over the closure of a Chinese consulate in Houston. The S&P 500 SPY ETF is trading down by about 20 bps, while the QQQ ETF is up 50 bps.
S&P 500 (SPY)
At this point, a decline below 3230 in the S&P 500 futures likely triggers a drop to around 3,150.
Copper needs to be watched closely as well, as it failed at resistance now two times around $2.99. A decline below the uptrend at $2.90 setups a drop to around $2.80. A break down in copper would be a big negative for the risk-on trade.
The dollar continues to weakening, and while the equity market seems unconcerned at this point, we will continue to monitor.
The 10-year continues to drift slowly lower and is now trading around 59 basis points. I see a drop below 55 basis points as a negative for the risk-on trade and headwind for the equity market.
JD.com has broken its uptrend and then failed to recapture it. The most important region to watch for in this stock is at $58.20. A break sets up a further decline to around $49.
Freeport is flattening and breaking its uptrend. If copper price starts to fall off, then perhaps the stock can fall back to around $12.70.
Tencent fell by 4% last night and looks like it may fill a gap down to 520HKD. That probably means that Amazon will be due to fall today as well, to around 2950.
The sell-off in Acadia yesterday seemed a bit severe and overdone. While the data miss on the depression study was disappointing, Acadia has a bright future with Dementia-related psychosis and potentially negative symptoms of schizophrenia. As long as $44.50 holds, then I think the worst is past, and we can start to rebound back to $48.
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