The Bear's Aren't Done Just Yet

The Bear’s Aren’t Done Just Yet

February 26, 2021

STOCKS – JPM, BAC, CRM, SBUX

MACRO – SPY, TLT

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Stocks had a rough day falling by around 50 bps; the big sell-off came in the final 10 minutes when it was revealed there was about $2.5 billion worth of stock for sale on the closing cross.

The index finally filled the technical gap today at 3,785, where it managed to find support. The index was clearly rejected on a few occasions around 3,850.

Until the index breaks below 3,785, it is tough to know where it could go next. If there is a further drop on Monday, it is likely to be the decisive drop that sends the index on its way lower. It will result in the RSI breaking support at 42, and a clear sign that momentum has shifted lower. I would expect there to be decent support at the 3,650 level if it should come to that.

10-Year

The 10-year finished the day lower at 1.42%. Not surprising to see yields come down some. I expect that they should stabilize, as there is firm resistance in the 1.50 to 1.6% region, with support of around 1.30%

JPMorgan (JPM)

“Value” stock JPMorgan is looking a little bit toppy here. I thought that was the case at $141, and that was wrong. The stock ran up to $147. Still, if I drew the chart out the right way, it looks like a bearish bump and run pattern along with a rising wedge pattern. It suggests a pullback to around $135. The RSI is insanely high at over 81.

Bank of America (BAC)

Bank of America, which is also considered a “Value” stock, is in a similar boat, dropping out a rising wedge pattern of its own with a dip below $34, creating a potential pullback to $29.75.

Salesforce (CRM)

Not a good day for Salesforce, not sure if this a “value” stock, but it might be one soon. The stock is sitting on support at $215.  A break of support will send the stock lower to around $191.

Starbucks (SBUX)

A big breakout in Starbucks today out of a bull flag probably sets up a push to around $115.

-Mike

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dropfall or descend to a lower place or levelMore (Definitions, Synonyms, Translation)