We had an interesting day yesterday on Wall Street. Initially, all strength has been sold and we dipped below the prior day’s lows in both indices. The action in the afternoon showed the resilience of the current bull market yet again. Tech started to participate and a few stocks in particular acted better pushing both the $SPY and $QQQ above the 8EMA reclaiming the lost momentum from the beginning of the week. This morning, Asian markets are up and Europe just opened higher. So far, US futures point to a flat open, but there is some relative strength in the Nasdaq. For today, the $SPY are set for a new all time high if the bears show no resistance. See if we manage to take out 441.80 with support first at the 8EMA around 438.65 and a bigger one around 436. The market continues to be narrow with many stocks looking completely broken and just a few making highs, thus keeping the indices in this upper channel.
$SPY chart pre-market
The tech sector looked vulnerable from the beginning of the week after the earnings reports from the main companies pointed to several important headwinds in the coming months. Early strength has been sold in most big tech names. Later in the afternoon, things reversed and we had a powerful push above the 8EMA, thus reclaiming some important lost momentum. Stocks such as $AAPL, $GOOGL and $AMZN closed very well and we expect some continuation from these. For today, we need to hold above 365 for this reversal to be confirmed. Pivot resistance is 366.93 with the all time high at 368.89. Be careful adding on strength since we may continue this sideways action which frustrates most day traders.
$QQQ chart pre-market
Apple will be on our radar today as it showed impressive strength throughout the day yesterday. With earnings behind this company and a new deal with $AMD and the beginning of its ‘buy now, pay later’ program, we expect this stock to outperform the overall market in the coming period. The all time high at 150 is in sight and we will see how it gets there in the coming sessions. For support, holding above 146.31 will be constructive f0r this new active sequence.
Amazon disappointed last week when it reported weaker than expected earnings despite its cloud business growing at an impressive pace. Yesterday it tried to reverse after dipping below 3300 and pushed inside its earnings gap. Today, see if it can stay within this gap and reclaim 3400 for better action. Its Price/Earnings ration has dropped to its lowest level in a while, and this might be an important catalyst for long term investors. It is currently much ‘cheaper’ than some of its peers. Use 3360 as support with 3391 as the first pivot resistance.
$AMZN chart pre-market