Not a great day for stocks as they continue to drop, as investors begin to realize a stimulus is unlikely to come before the election. Coupled with rising coronavirus cases in Europe and the US, it was enough to get the market worried.
The bigger question that should be on everyone’s mind is if there is no deal until after the election, there is a good chance there is no deal until after January. If that is the case, and COVID cases are spiking, it could mean the economy is about to take another hit. It doesn’t take lock-downs to slow the economy; all it takes is people choosing to spend less.
It could certainly increase the risk and the odds of a double-dip recession, certainly the market has not priced in that outcome. That is the big risk on the horizon at this point.
S&P 500 (SPY)
The S&P 500 fell below support at 3,425 and managed to fill the technical gap at 3,370 quickly. That level held and bounced fairly strongly off of it. Perhaps it will mark a bottom for the balance of this week, who knows. Clearly, it sets up a good chance for a rebound tomorrow or later this week to fill the gap up at 3,465.
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Nvidia (NVDA)
Nvidia had an interesting day, as it moved to its lower uptrend for the first time since September 24. The big question is if it will bounce or continue lower. Rising volume on falling prices signifies that sellers are entering the stock, while the RSI is clearly trending lower. A drop below that uptrend would result in a decline to around $461.
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Apple (AAPL)
Somehow Apple managed to finish the day higher and stayed within its wedge. I am still somewhat bullish on Apple and think it can still climb to around $124.
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Salesforce (CRM)
Salesforce was weak today, falling to $236, but holding. That’s a big level that needs to keep for Salesforce to avoid the gap fill down to $215.
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