Stocks Catch Late Day Bid As Tesla Soars

Stocks had a pretty underwhelming week, with the S&P 500 mostly finishing flat. July 10 was a strange day, as there wasn’t much going on around lunchtime, yet the market caught an end of day bid.

Perhaps there was some short-covering going into the close. I noticed the market caught fire around the time that Tesla broke out in the afternoon, and perhaps that ignited the risk-on momentum for algos and ETFs. There was no reason for the rally, otherwise.

There were a few positive remdesivir comments in the morning, but the market doesn’t seem to care about the coronavirus anymore, anyway.

S&P 500 (SPY)

I find myself confused regarding the S&P 500 and what happens next. There is a downtrend in place, and that has limited the market’s advance since the beginning of June. But, there is a pattern that resembles a bullish flag pattern.

If that is the case, then the market will rally sharply to around 3,240. Unfortunately, with the way the market went out Friday, it leaves me guessing as to what happens next. It could very well be that the next short-term move for the S&P 500 is higher.

NASDAQ (QQQ)

The NASDAQ has gone parabolic in comparison to the S&P 500, and it is valued at its highest level versus the SPY.

Financial (XLF)

The financials ran up Friday, ahead of some significant earnings next week. If the S&P 500 can get the bank’s stocks working in its favor, then the next level to watch for could very well be around that 3,230 level. The XLF got back to $23.60, which has been a problematic level since the middle of June.

Tesla (TSLA)

Believe it or not, Tesla may have been responsible for dragging the entire market up. The stock had a 2.5% weighting in the QQQ’s, and it was up 10% on the day. You can see that as Tesla broke out, it eventually led to the Q's moving up. Once, the Q's started moving up, it took everything else with it, because that how ETF’s work.

PayPal (PYPL)

PayPal has seen its RSI go nowhere, despite being a stock that has been rising. I wouldn’t want to be near this thing when that gap gets filled.

Visa/Mastercard

Again, I can’t understand why we haven’t seen the same optimism for Visa and Mastercard that we have seen for PayPal or Square, it makes zero sense to me.

Mastercard (MA)

The chart for Mastercard doesn’t even look that strong, which is just bizarre. Since everyone is buying on Amazon, shouldn’t Mastercard be performing much better? It looks like it is about to go to $272.