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S&P 500 (SPX, SP500)

These days are hard, and I don’t think today’s rally will last, unfortunately.  If we take a close look at the S&P 500 chart, there are two reasons why. Notice where the index failed today. Yep right around the upper end of danger zone box. That is only problem number 1. Next is that significant downtrend that we have to deal with that is currently sitting out there between 2,725 and 2,740. Until we can past that trend line, the direction is still lower. Today sure felt nice, hope you enjoyed it!  (Premium Content:  Don’t Get Sucked In, Not Yet!)

NASDAQ (QQQ, NDX)

The NASDAQ is a bit worse because the S&P 500 at least gives us a chance for hope. The NASDAQ, not so much.  I don’t think you need me to me to tell you that the NASDAQ failed at the trend line. I believe that is relatively obvious.

Big Day

Yeah, I guess we can say tomorrow is a kind of sort of important day. Either both indices break the downtrend and move much higher, or we head  lower, back to yesterday’s lows. I’m feeling a bit bearish though. Why? Well, we know just how much the ALGO’s love to play the fill the gap game, and there are two giant gaps out there just waiting to be filled from today’s big opening.

I would not be surprised to see all of today’s gains wiped out by some point tomorrow. Seriously.  It will be what happens after we revert to those lows that will matter. If the market can hold the lows then at least there is hope for a short-term bottom, if we don’t keep the lows, then there more pain in store when Monday starts.

How Will It Go

How I’d like to see it play out? A gap lower followed by a retest of Wednesday’s low or maybe even slightly lower. Then at 1:30 PM a turn higher, followed by a strong rally into the close with a finish in the green. You think I have been through this a few times?  Just a few.

Amazon (AMZN)

Amazon is surely not helping the situation at the moment. It is not good when a company regularly provides revenue guidance below expectations. But when you are Amazon, it is not only not good, but it is something investors aren’t used too. The result. A stock that gave back all of today’s gains, and trading at yesterdays lows in the after-hours.

The good news is that the stock did find support at its 200 day moving average the other day.  Perhaps that helps tomorrow. But right it is trading to $1620.

Alibaba (BABA)

Alibaba looks like it may be getting ready to take its next leg lower.

AMD

AMD failed at resistance at $20.  Next stop $15.50 to $16.

JPMorgan (JPM)

JPMorgan looks like it struggled to get over resistance at $106.50. $102 support is essential because a drop below it will lead to a drop to $94.

Citigroup (C)

Citigroup may be on its way to $61. Look at that RSI just collapse.

How are those buybacks working out? Not so good.

Industrials

Have you been paying attention to these industrial stocks. My goodness, they make Nvidia’s 30% drop look tame.

Caterpillar (CAT)

Just look at the carnage in Caterpillar, if it is going to stop falling this $108 to $112 region needs to be that place. I’d hope for the stocks sake.

3M (MMM)

Look at  3M. The crazy thing, this is still trading at a 2019 PE of 17!

Dow DuPont anyone?

Union Pacific.

Freeport McMoran going to $9.25?

The way these charts act one would think the economy was about to head over a cliff.  Great just in time for GDP and PCE tomorrow.  Oh boy!

-Mike

-Mike

Photo Credit Via Flickr 

Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future.

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