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Stocks Rise On November 2 Ahead Of Election Day

November 2, 2020

Stocks – SHOP, AMD, MSFT

Macro – QQQ, SPY

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Stocks finished higher by around 1.2% in what seemed to be a rebound day from oversold levels. There was no clear catalyst for the strong day. It had been up by nearly 1.5% following the better than expected ISM report, but even that couldn’t keep stocks move higher all day. It was a rather dull day overall.

Perhaps there is some nervousness or positioning ahead of tomorrow’s election. It seems unclear to me what today was about. There was a rotation out of the tech and into the reflation sector. Without knowing what the government’s makeup will be after tomorrow, it seems too hard to know if and how people are positioning.  

S&P 500 (SPY)

The index filled most of the gap from the morning opening but couldn’t fill it all the way. It leaves open a possible retest of that level tomorrow. Additionally, we still have to contend with a potential double top pattern working its way out. It will take a drop below 3,200 to trigger what would be a signal for a steeper drop. 

Nasdaq (QQQ) 

The Qs did continue to move lower today, rising by 35bps. At this point, it continues to really trend lower in a fairly well-defined channel. There is a possibility the path is being to shift to something that suggests a steeper downtrend.

AMD fell below $75 today, and now that price is likely to act as resistance. A failure at resistance likely sends the stock on a path even lower, to $69. 

Shopify (SHOP)

Shopify continues to trade very poorly and is sitting on support at $910. That is crucial because when it breaks, it shall drop towards $850. 

Microsoft is very close to breaking down, with support around a price of $198. After that, it seems likely to drop to around $187.

Skyworks (SWKS)

Skyworks posted blow-out results and guidance. It seems that most of the good news must-have been priced in already, with the shares hardly moving higher.  I owned this stock for so many years, waiting for the 5G rollout. It seems that business is doing well and 5G is helping them. I’m just sorry I sold the stock 6 months ago. Live and learn. 

-Mike

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