April 14, 2021
STOCKS – SHOP, ROKU, XBI, FCX
MACRO – SPY, VVIX
- Midday – Stocks Pullback Heading Into OPEX
- Morning Note- All Signs Point To A Post Opex Hangover
- Midday: Stocks Are Caught In A Apple/Tesla Gamma Trap
- Earnings Preview: The Banks
- Midday: Volatility Rises As Biotech Falters
- Morning Note – Options Market Does Not Support Higher Stock Prices
S&P 500 (SPY)
Stocks finished the day lower. The move lower shouldn’t come as a surprise to anyone given how much they had advance recently. After all, the S&P 500 was overbought and is still trading at the upper end of the range. It seems that there is still a good chance for the index to fall back to the lower end of the trading channel around 3,960, which is what I am still targeting over the very short-term, meaning next one to two weeks.
Meanwhile, the short-term uptrend off the March 25 lows was broken today, which could also signal a short-term change in trend.
The VIX Volatility Index (VVIX) continues to creep higher as well, and that is telling us that implied volatility levels are picking up below the surface. We should be watching for a surge in the VIX index in the coming days. This, too, will likely add more pressure to the S&P 500.
The Biotech ETF (XBI) tried to bounce today, and it did; it just failed at the downtrend, which foretells more selling in the days ahead.
Freeport looks like it may have broken free of a bull flag pattern, and that likely means it has further to climb from here. The first level to look for is likely to come around $39, but in reality, given the flag pattern’s size, it should go higher than $39. For now, $39 is a good starting point.
Roku made it back to resistance at $375, and that is where it stopped. The RSI is still trending lower, which suggests this recent rally higher was a dead cat bounce and that the stock is likely to resume a move lower.
Shopify failed pretty badly today at resistance around $1,185. The fact that the stock failed here seems important, as this is a key level. It could indicate the recent move higher in Shop is over, and the trend lower is ready to resume, pushing shares back to $1085.
That’s all for tonight.
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