The Sellers Still In Control Despite 2 Day Rally
Stocks are trading flat to lower on September 29 as the Algo's continue to hold the line.

The Sellers Are Still In Control Despite A 2 Day Rally

September 29, 2020

STOCKS – QCOM, NXPI, SQ

Macro – SPY, EWG, EWY

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Germany (EWG)

Stocks are trading flat this morning after yesterday’s advance, and the algo’s around the world are doing there best to keep the major indexes below their respective 50-day moving averages. The German DAX is one such example, which is trading lower today by 40 bps, after failing yesterday at its 50-day moving average. 

South Korea (EWY)

Meanwhile, the KOSPI reached and failed at its 50-day moving average overnight. 

S&P 500 (SPY)

Meanwhile, the S&P 500 futures continue to flirt with their 50-day moving average and struggling for the second day in a row. 

It seems to tell the tale that the sellers are still very much in control of these markets. It would suggest that caution is warranted and that these big moves higher the past few days are nothing more than a rebound in an otherwise downward-sloping market. 

I would expect the S&P 500 to fill the gap created from yesterday’s move higher, back towards 3300.

Square (SQ)

Square is up a bit in the pre-market after getting its rating pushed higher to outperform from peer perform at Wolfe Research with a $195 price target. The big test will come around $163, and if the stock can advance past the gap fill. If it can’t, then a move back to $157 is likely. 

Qualcomm (QCOM)

Qualcomm had its price target raised to $120 from $110 at Barclay’s. The stock probably has a little more to rise, with a gap to fill up at $123. 

NXP Semi (NXPI)

NXP Semi had its price target increased to $140 from $130 at KeyBanc. The stock has some stiff resistance at $125 and is likely to fill the gap lower around $120. 

That’s it for this morning. Good luck today

-Mike

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