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Stock Market Today: June 15th - 19th, 2020

Discussion in 'Stock Market Today' started by bigbear0083, Jun 12, 2020.

  1. bigbear0083

    bigbear0083 Content Manager
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    Welcome Stockaholics to the trading week of June 15th!

    This past week saw the following moves in the S&P:
    [​IMG]

    Major Indices End of Week:
    [​IMG]
    [​IMG]

    Major Futures Markets on Friday:
    [​IMG]

    Economic Calendar for the Week Ahead:
    [​IMG]

    What to Watch in the Week Ahead:

    • Monday

    8:30 a.m. Empire State survey

    4:00 p.m. Treasury TIC data

    • Tuesday

    Fed Chairman Jerome Powell before Senate banking

    8:30 a.m. Retail sales

    8:30 a.m. Business leaders survey

    9:15 a.m. Industrial production

    10:00 a.m. Business inventories

    10:00 a.m. NAHB survey

    • Wednesday

    Fed Chairman before House Financial Services Committee

    8:30 a.m. Housing starts

    • Thursday

    8:30 a.m. Initial jobless claims

    8:30 a.m. Philadelphia Fed

    • Friday

    8:30 a.m. Q1 current account

    10:15 a.m. Boston Fed President Eric Rosengren
     
  2. bigbear0083

    bigbear0083 Content Manager
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    Rollercoaster Session Fails To Dent Retail Euphoria
    In the end, that "gamma neutral" level in the S&P at 3,046 which we highlighted earlier, proved too much for the bulls...

    [​IMG]

    ... with stocks failing to rise above it after a curiously diagonal overnight levitation faded in early trading, followed by a subsequent bounce that got just shy of the neutral line before drifting lower for the rest of the day.

    [​IMG]

    [​IMG]

    Besides gamma, what else drove Friday's market? Although it’s unclear exactly what’s led to today's rollercoaster moves that saw the Dow surge more than 800 points before sliding in the red and recovering some of the gains, several headlines weighed on the markets in early trading:

    • WHO Director-General Tedros said the pandemic is escalating globally and the virus will wreak more havoc.
    • The CDC said that if cases go up again dramatically, mitigation efforts as seen in March may be needed again.
    • Florida Covid cases rise 2.8% vs pervious 7-day average of 2.0%
    • The Fed said in its semi-annual report to Congress that the economic damage from the recession may be "persistent" as a collapse in consumer demand could bankrupt many businesses, and there’s uncertainty about future demand and productivity as firms shift production processes, which could lead to lower wages
    In any case, there was no coherent market catalyst in either direction, which is probably why the VIX gyrated just as wildly, rising as high as 44 from a session low of 35 before trying to find a resting place somewhere inbetween.

    [​IMG]

    [​IMG]

    The volatility led to some amusing intraday incidents such as this tweet from Reuters: "We are deleting a video saying Wall Street had bounced back on Friday, which went out after stocks had turned negative."

    And speaking of early surges, the divergence between the day and night session has exploded, and is now the widest it has been since the start of May as a result of Thursday's daytime rout even as overnight sessions remain largely upward bound.

    [​IMG]

    While some have suggested that Thursday's market rout was reminiscent to the start of the March puke, one place where it differs is the apparent lack of a funding shortage: FX basis swaps trade at levels suggesting that dollar-funding pressures are missing for the time being, which is largely thanks to the expanded swap lines announced in March between the Fed and most central banks. As Bloomberg's Ye Xie writes, the lack of funding stress has "cut off the vicious feedback loop between stock declines and funding stress" which is good news for now, assuming the dollar doesn't spike in the coming days.

    [​IMG]

    [​IMG]

    While stocks gyrated wildly in the past three days, rates have been a sea of tranquility by comparison, and after the 10Y hit 0.95% last week, it has drifter lower along with much of the curve, closing around 0.70% on Friday in a dramatic flattening of the yield curve, which incidentally comes just as most sellside desks start pushing for steepeners as the 10Y approached 1%.

    [​IMG]

    Other assets were relatively tame with oil inching fractionally higher, the Bloomberg Dollar Index up just 0.1% after some earlier volatility and gold rose 0.2%. Not even Bitcoin dared to move much.

    Finally, while the broader market gyrated in a rollercoaster of illiquidity, one place where there was never any doubt was in Robinhood where the 20 biggest intraday moves were all additions... appropriately enough with bankrupt Hertz at the very top.

    [​IMG]
     
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  3. bigbear0083

    bigbear0083 Content Manager
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    Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2020-
    [​IMG]
    [​IMG]

    S&P sectors for the past week-
    [​IMG]
     
  4. bigbear0083

    bigbear0083 Content Manager
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    Is This The Start Of A New Bear Market?

    “Stocks take an escalator up, but an elevator down.” — Old investment axiom

    The saying above sure happened yesterday. In the end, the S&P 500 Index fell 5.9% for the worst day since March 16 and the first three-day losing streak in more than three months. What does it mean? We’ve been on record that we expect some type of well-deserved pullback or at least consolidation after the 45% bounce off of the March 23 lows and the best 50-day rally ever. Then add in the fact that June has been the worst month of the year for stocks since 2000 and some type of weakness is perfectly logical here and now.

    “In many ways, this is one of the most overbought stock markets we’ve ever seen. Now the catch to this is previous times we’ve seen major levels similar to now have been closer to the beginning of bull markets than the end of bull markets,” explained LPL Financial Senior Market Strategist Ryan Detrick.

    This is now one of the greatest surges off a major low ever. It is perfectly normal to see a drawdown of double digits after the initial surge weakens. This could be happening now.

    [​IMG]

    We’ve shown that huge up months like April tend to eventually resolve higher, but some near-term weakness is possible.

    [​IMG]

    Also, when more than 90% of the stocks in the S&P 500 are above their 50-day moving average, this shows solid longer-term results. Again, suggesting that very overbought isn’t always a bad thing.

    [​IMG]

    There was a huge spike in stocks marking new monthly highs, again historically an overbought signal. This opens the door for some near-term weakness, but is a very positive sign longer-term.

    [​IMG]

    Last, in the LPL Chart of the Day, the S&P 500 was recently more than 13% above the 50-day moving average, one of the highest levels ever. The good news is one-year later stocks were higher every single time. Yet another clue that historically overbought isn’t always a bad thing for the bulls.

    [​IMG]

    A record run, over-the-top excitement from small traders, the Nasdaq at 10,000, historically high multiples, and seasonality all could be a factor in why a pullback here could be perfectly normal. In fact, if you are bullish, after a 45% rally, one of the best things would be for prices to reset some here over the coming months. We would be a buyer of weakness and use it as an opportunity for longer-term price appreciation.

    Persistent Volatility Runs Into Resistance & Exuberant Sentiment
    [​IMG]
    We have all been gobsmacked by velocity and strength of this V-shaped rally off the March 23 bear market low. For the record this rally became an official Ned Davis Research defined bull market on May 26 when DJIA was up 30% from the low when it made a new recovery high after 50 calendar days (see NDR definitions below). And this was on the back of the shortest bear market on record, which lasted only 40 days. Today’s market comeuppance is an important reminder that we need to be patient with this market and heed our cautious analysis and stance.

    This is still the “Worst Six Months” and as we warned in the May Outlook when the market is down during the “Best Six Months” (November-April) as they were in 2020, the “Worst Six Months” (May-October) were down or flat 86% of the time with a median S&P decline of -6.7% since 1950.

    Other seasonal indicators are also flashing the caution sign. This year’s negative January Barometer and breached December DJIA low, point to possible retests of the lows and choppy, volatile trading over the next several months. See the updated composite graph of the seasonal pattern for these 22 years since 1950 in the June Outlook.

    It appears that quite a fair amount of hope was built into the rally. Lots of hope that everything is just going back to the way it was real soon. But COVID cases are on the climb again and folks are concerned that a pause and/or reverse of reopening could delay the economic recovery and derail the bull. Up until the past few days it felt like mid-February again with the market ignoring economic and corporate data as momentum pushed everything higher.

    The jobs report was a bit unbelievable and then Fed Chairman Powell’s candor and reserved outlook at yesterday’s press conference put the fear right back into the market today. Meanwhile the Atlanta Fed’s GDPNow model currently estimates that 2020 Q2 GDP growth will be down -48.5%.

    Sentiment had also become rather exuberant as the Weekly CBOE Equity Only Put/Call ratio we track in the “Pulse of the Market” hit 0.43 last week – its lowest level since the week ending 4/10/2010 about three weeks before the infamous flash crash. Investor’s Intelligence Advisors Sentiment survey Bullish advisors are now up to 56.9%. Correction advisors are down to 22.5% while Bearish advisors have slipped further to 20.6%, putting us at caution levels.

    Technically, things deteriorated rapidly today. After blasting through several levels of resistance we have been tracking as shown in the chart here S&P 500 stalled at 3210 and plunged 5.9% today through 3115 support/resistance and closed just below 3010 support/resistance which sits at the 2019 summer highs. The next major support level below here is 2725 right near where the 50-day moving average turned up in mid-May, which would be a 15.7% correction from the recent recovery high reached this past Monday, June 8.

    Hope springs eternal, but caution remains the prudent course of action.
    [​IMG]
    Ned Davis Research bull and bear market definitions:

    A cyclical bull market requires a 30% rise in the DJIA after 50 calendar days or a 13% rise after 155 calendar days. Reversals of 30% in the Value Line Geometric Index since 1965 also qualify. A cyclical bear market requires a 30% drop in the DJIA after 50 calendar days or a 13% decline after 145 calendar days. Reversals in the Value Line Geometric Index also qualify. Bull and bear markets are measured at peak and trough dates, so both the time and price criteria must be met as of the peak and trough dates.


    More Volatility Likely During June Options Expiration Week and Beyond
    [​IMG]
    The second Triple Witching Week (Quadruple Witching if you prefer) of the year brings on some volatile trading with losses frequently exceeding gains. NASDAQ has the weakest record on the first trading day of the week. Triple-Witching Friday is usually better, DJIA has been up ten of the last seventeen years.

    Full-week performance is choppy as well, littered with greater than 1% moves in both directions. The week after Triple-Witching Day is horrendous. This week has experienced DJIA losses in 26 of the last 30 years with an average decline of 1.07%. S&P 500 and NASDAQ have fared slightly better during the week after over the same 30-year span, declining 0.72% and 0.23% respectively on average.
    [​IMG]
    [​IMG]
     
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  5. bigbear0083

    bigbear0083 Content Manager
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    Here are the current major indices pullback/correction levels from ATHs as of week ending 6.12.20-
    [​IMG]

    Here is also the pullback/correction levels from current prices-
    [​IMG]

    Here are the current major indices rally levels from correction low as of week ending 6.12.20-
    [​IMG]
     
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  6. bigbear0083

    bigbear0083 Content Manager
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    [​IMG]

    Here are the upcoming IPO's for this week-

    [​IMG]
     
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  7. bigbear0083

    bigbear0083 Content Manager
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    Stock Market Analysis Video for June 12th, 2020
    Video from AlphaTrends Brian Shannon


    ShadowTrader Video Weekly 6.14.20
    Video from ShadowTrader Peter Reznicek
     
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  8. bigbear0083

    bigbear0083 Content Manager
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    Stockaholics come join us on our stock market competitions for this upcoming trading week ahead!-

    ========================================================================================================
    ========================================================================================================

    It would be pretty sweet to see some of you join us and participate on these!

    I hope you all have a fantastic weekend ahead! :cool:
     
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  9. bigbear0083

    bigbear0083 Content Manager
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    Here is a look at this upcoming week's Global Economic & Policy Calendar-

    (GLOBAL ECONOMIC AND POLICY CALENDAR NOT YET POSTED!)
     
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  10. bigbear0083

    bigbear0083 Content Manager
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    [​IMG]

    Here are the most anticipated Earnings Releases for this upcoming trading week ahead.

    ***Check mark next to the stock symbols denotes confirmed earnings release date & time***

    Monday 6.15.20 Before Market Open:
    [​IMG]

    Monday 6.15.20 After Market Close:
    NONE.

    Tuesday 6.16.20 Before Market Open:
    [​IMG]

    Tuesday 6.16.20 After Market Close:
    [​IMG]

    Wednesday 6.17.20 Before Market Open:
    NONE.

    Wednesday 6.17.20 After Market Close:
    [​IMG]

    Thursday 6.18.20 Before Market Open:
    [​IMG]

    Thursday 6.18.20 After Market Close:
    [​IMG]

    Friday 6.19.20 Before Market Open:
    [​IMG]

    Friday 6.19.20 After Market Close:
    NONE.
     
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  11. bigbear0083

    bigbear0083 Content Manager
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    T0rm3nted likes this.
  12. Vdubman

    Vdubman Active Member

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    Bulls better hope that printing press doesn’t have a jam Monday!

    Bears better hope the second wave is real and not a hoax like the first one
     
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  13. bigbear0083

    bigbear0083 Content Manager
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  14. Frankenstein

    Frankenstein Active Member

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    Ok. There's the SPX 3050. I'm all out. Focusing on risk management. And then, hopefully, another collapse to enter, starting from scratch.
     
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  15. stock1234

    stock1234 2017 Stockaholics Contest Winner

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    What a comeback for this market :eek:
     
  16. Steven_Burt

    Steven_Burt 2019 Stockaholics Contest Winner

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    If the bears want to stop the momentum, now is the time


    spxs.png
     
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  17. Steven_Burt

    Steven_Burt 2019 Stockaholics Contest Winner

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    Well that was soundly rejected

    spxl.png
     
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  18. Vdubman

    Vdubman Active Member

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    Money printer jam repaired today! Brrrrrrrrrrrrrrrrrrrrr
     
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  19. stock1234

    stock1234 2017 Stockaholics Contest Winner

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    Steven_Burt likes this.
  20. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    Chinese internet stocks looking good this month.
    Even managing to carry GSX, which is largely considered a fraud. (Then again, it has also been a good month for bankrupt stocks so far, no?).
     
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