August 28, 2020
STOCKS – INTC, SWKS, QRVO, AMD
Macro – SPY, SMH, DXY
Mike’s Reading The Markets (RTM) Premium Content – NOW WITH A 2 WEEK FREE TRIAL
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- Lunacy Builds As Analysts Fall Over One Another To Raise Targets
- Nasdaq Setting Up For Typical 4-5% Correction
- Internals Decline As Risk Assets Diverge
- Pfizer Call Buyers Come Back For Round 2
S&P 500 (SPY)
Stocks are rising here in the US, despite a mixed overnight trading session. Currently, the S&P 500 minis is trading up 27 basis points to 3495. The RSI is now at 79, and the upper Bollinger band has been breached. The last time the RSI was higher was in January 2018. At least, based on the chart, it could continue to rise to around 3,600.
The index is extremely overbought, and this puts it in hazardous territory. When the market gets this overbought, it doesn’t take much for momentum to shift in quickly, and unexpectedly.
The dollar is sinking today after Shinzo Abe said he’d resign from his post as PM of Japan. This is causing a big risk-off move in Japanese equities, and a big push into Yen. As a result, the dollar is weakening, and we see yields in the 10-year lower. This is an essential level for the dollar, and not what I had been thinking would happen. But then again, I didn’t know Abe would be resigning.
We should probably watch the SMH pretty closely. It looks like it retesting the breaking of its uptrend. It could mean that the ETF is heading lower from here.
AMD has struggled around resistance at $86.50. It is a significant level as it could market a double topping pattern, a reversal pattern.
Intel is the only stock that doesn’t seem to go up these days. It probably means it goes lower to $47.60.
Skyworks broke that significant uptrend, and if it suggests a reversal of trend, then $128 would be the next level to look for.
We can see that Qrovo has started to roll over as well, with the potential to fall back to around $115 and fill the gap.
Ok, see you later.
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