Stocks Drift Lower On February 13 But Is It A Fill The Gap Type Of Day

Stocks are falling on February 13 due to a “recount” of the number of people in China with the coronavirus. It has resulted in the market across Europe to fall by fall by around 1%, while S&P 500 futures are falling by about 80 bps.

S&P 500 (SPY

The decline seems odd to me from several standpoints. First, because the initial reaction in Asia was somewhat muted, meaning the markets were mostly higher even when the news first came out. It was nearly 3 hours into the session that the market started to turn lower, finishing the day down about 24 basis points, while holding crucial support around 2,230.



Meanwhile, Hong Kong fell by just 34bps, while Japan was down only 14bps. So I’m wondering why US futures are down so much more dramatically. We will see if the sell-off in the US lasts. It feels like one of a gap lower and fill the gap type of days.



Cisco (CSCO)

Cisco shares are falling after reporting better than expected results, and inline guidance. The stock is falling; I think because investors were looking for signs that the business was picking up. Instead, Cisco gave me the impression that wasn’t the case, yet. Cisco tends to be a company that underpromises and over deliveries, so the inline guidance isn’t surprising to me. There is some support around $48, with the stock giving back all it pre-earnings gains. I had thought the stock would head to $55. We’ll see where it is in a couple of days.

cisco, csco


Alibaba (BABA)

Alibaba reported results this morning, and the stock is pretty much flat, it had been lower before the results. I had noted yesterday some buying for the $250 calls for expiration this week, whoever was making a bet shares would rise sharply is not likely to be happy. I generally think the trend in Alibaba remains higher.

alibaba, baba


Tesla (TSLA)

Tesla just announced it would commence a $2 billion equity offering. I think it is a smart move for the company. The chart is somewhat useless at this point, but there does seem to be some support at the upper uptrend. It will also reset the stock, and set a new floor, and the pricing of it will be the key. 

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Disclosure: Michael Kramer Own SPY Calls 

Disclaimer: This article is my opinion and expresses my views. Those views can change at a moment's notice when the market changes. I am not ...

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