Stocks are mixed this morning despite having a sharp sell-off at the end of last week. The S&P 500 ETF SPY is trading higher by 55 basis points, while the Qs are down five basis points. More interesting is how the S&P 500 futures have now risen to around 3,020, and have failed each time overnight. It will be an essential level to watch throughout the day, as we had seen this pattern the last few days in the futures during the overnight session only to see the market turn sharply lower when the cash session resumed trading.
On June 23, the level of resistance was at 3145; on June 26, it was around 3,080, today it is about 3,020.
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Nasdaq 100 – QQQ
What may be more critical is that the Qs are flat today, and are not rising and sitting right on support at $240.I have pointed out this level of support multiple times, and just how important it is. As a break of this support level would lead to a break in the uptrend for the ETF since April, and the start of a sharper decline in the ETF and the Nasdaq 100, with a break likely leading to a drop to around $235.
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Facebook (FB)
One reason for the weakness is because Facebook is down another 4% this morning, trading around $208. The stock is now trading below the critical level of $213, and that means it is likely to lead to a further drop towards $203.
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Starbucks (SBUX)
Starbucks is trading lower today, and it too finds itself at a critical level of support also at the downtrend line of $70.50. A break of this level would be a terrible sign for the stock and likely suggest a more significant decline back to $68.
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Alibaba (BABA)
A member asked me about Alibaba over the weekend. At the moment, the stock still looks healthy. The great thing about technical analysis is that it typically gives us a solid view of what the market is currently thinking about a stock or a company and its outlook. Now, the stock is trending higher and held up relatively well last week despite the choppy markets and some tensions between the US and China. As long as the stock can stay above $211, it seems like the shares can continue to rise and push to $230. It would be a terrible sign if the stock breaks support at $211, likely resulting in a pullback to around $200. At this point, the rising RSI seems to favor the shares continuing to push higher.
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AMD (AMD)
AMD fell sharply on Friday due to a massive sell imbalance in the final few minutes of the day. It seems possible that the stock can bounce back to test resistance at $52.90. Support at $49 is a critical level. The RSI suggests that any bounce higher is likely not to last and that the shares will turn lower once again, with shares likely failing at $52.90
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Micron (MU)
Citigroup is out today, saying that Micron will likely miss third quarter guidance estimates. Again, I think Micron is heading lower to $45.50.
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