July 7, 2020
STOCKS – FB, UBER, NVDA, DIS
MACRO – SPY, EWG
Mike Reading The Markets Premium Content – $35/Month or $300/Year
- Nvidia Is Priced For Perfection, May Have Topped Out?
- Stocks Trying To Breakout Ahead Of Data
- 3 Keys To The Week Of July 6
- Square May Drop By As Much As 20%
- Earnings Trends – 7.4.20
S&P 500 (Futures)
It didn't take long for us to find out what would happen when the S&P 500 futures reached the downtrend. Last night that is what happened and the futures reversed somewhat sharply after hitting that overhead level of resistance. Worse, it pushed the futures lower below that dreaded level of resistance around 3,150. This is not the best sign, especially given how healthy that level had acted as resistance in the days leading up to yesterday's "break out" it should have served as a much stronger level of support. That did not happen.
Markets around the world started healthy last night, but quickly turned lower, with South Korea finishing the day lower by over 1%, and Japan dropping by roughly 45 bps. Even Germany is trading lower this morning by over 1%. The German DAX, for now, appears to be filling the gap from yesterday's move higher.
S&P 500 ETF (SPY)
The S&P SPY ETF is also filling the gap, and to this point is holding on to support around $314. A lot still needs to be determined at this point, but one does not want to see the SPY ETF drop below $314 today.
Copper may be signaling there is more to this sell-off then just a couple of gap fills. The metal is sitting on a significant level of support and uptrend around $2.73, with the potential to fall much further if that uptrend is breached.
Facebook will be important to watch today, as the stock did not make a new high yesterday, and it failed at resistance around $240, which has now failed 3 times prior. Don't be surprised to see the stock work its way lower back to $222.
I wrote yesterday in the premium area that Nvidia was priced for perfection, and that, coupled with the rising wedge pattern, along with some bearish betting indicate the stock may be on its way lower to $350. Premium content - Nvidia Is Priced For Perfection, May Have Topped Out?
Disney has held on reasonably well, but I don't see how. They will continue to face problems as long as the virus remains, and based on current trends across many states, the problem seems to be getting worse, not better. It isn't only a threat to Disney, but the entire economy, and the market. Its all about the $109 level, a break of $109, and things get interesting very fast for Disney.
Uber jumped yesterday but failed to break above resistance, and I think that is a bad sign. I'm not sure what this company is anymore; I'm not sure they know either. They lose a ton of money every quarter, and to me, they made a very sharp turn yesterday, moving harder into the food delivery business. Which is fine, if that is what you thought Uber was. Before the pandemic, it was a ride-sharing business, with a lot of potential for growth. Now they are a food delivery business, and it seems as if they are just trying to remain relevant. Maybe I'm missing something, and I'm too harsh, I will do more work on Uber. For now, I think the risk is for shares to fall back to $30.50.
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