OCTOBER 21, 2020
STOCKS – AMD, NFLX, TSLA, SHOP
MACRO – SPY, QQQ, SMH
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN TSLA
Stocks were down on October 21, with the S&P 500 dropping around 25 basis points, while the Qs fell by around 10 basis points. It didn’t feel like an overly exciting day, with markets basically waiting on headlines regarding a stimulus deal. So far, there has been no news of a deal, just that they are getting closer, and I continue to think there will be no deal. But the market continues to trade off various headlines.
S&P 500 (SPY)
As a result of the dullness, the technical charts really didn’t change very much. We are pretty much in the same spot as yesterday, hovering around support at the S&P 500 around 3,440. I still think we have a good chance to target 3,600 by the election.
NASDAQ 100 (QQQ)
Meanwhile, the Qs are hanging around the $284 region.
The 10-year yield reached its highest levels in some today and climbing above 80 basis points. The higher yields are a result of the potential more stimulus coming.
The SMH is starting to show major signs of weakness, and I noted earlier that a massive option bet was placed that the ETF falls from here. A drop below $180 would create problems for the sector. (Premium content – Betting Semis Drop- Morning)
AMD is one of those chip stocks that keep on falling. Again, we will still need to break below $75 before knowing just how bad things will get. The RSI keeps telling us the same thing; lower prices are coming.
Netflix had a weak day as expected. But the stock managed to fall below that critical level of support around $495, which likely sets up a further drop to around $470.
Tesla reported better than expected revenue and earnings while maintaining its full delivery guidance. The stock is trading up only modestly. I still think it is likely heading higher, towards $460. There was also a tremendous bet that suggests shares continue even higher towards $600 into June. (Premium content -first 2 weeks are free to try – Tesla’s Stock May Be Heading Much Higher Long-Term)
An interesting pattern forming in Shopify, a potential head and shoulders. It has a lot of the same characteristics as AMD.
Have a good one
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