Stocks were crushed today, with the S&P 500 falling by almost 3.5%. This week, the index is down more than 5%, and for some reason, it reminds me a lot like March. Of course, I say that because the coronavirus is once again spreading like wildfire, and Europe is locking down. While I don’t think lockdowns are heading our way on a national level, I do think regions of the country on a local or state level will. At the very least, I think people will be less willing to go out and spend regardless of a lockdown. It really raises the chances of a double-dip recession. 

I know the idea of a double-dip recession seems crazy to some of you, but the economy is pretty weak. Just because we don’t have a shutdown doesn’t mean the economy couldn’t contract by 1 or 2% in the fourth quarter and the first quarter of next year. I think it could do that rather easily. Remember, growth for the economy is based on Q/Q on an annualized basis. 

I know that a double-dip recession isn’t the trending term on many financial news websites, but I have been at this game long enough to know how the market works. It starts with COVID fears and will eventually turn to the recession narrative. 

Anyway, my two weeks of bullishness is over. This is why I have repeated that I thought the market could rise until the election. Well, that was that. The market has zero fundamentals to support it at current valuations, and the risk of a double-dip recession is not at all priced into the equation at this point. That will mean that earnings estimates for next year are too high, and those will need to come down.

I still think the S&P 500 could be heading to 2,860. 

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Microsoft (MSFT) 

Microsoft reported incredible results last night, as I have said already. But still, the stock suffered today, falling by 5%. It was not spared. Why, because it is trading at its highest valuation since the early 2000s. I love the company for the long-term, don’t get me wrong. I think it needs to consolidate some, with the next level around $198. 

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Nvidia (NVDA)

Well, that a wrap; after 7 months of maintaining an uptrend, Nvidia finally broke down today. The RSI is melting, and I think this one goes lower still; $ 461 for starters seems good.

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Acadia (ACAD)

Someone knows something because Acadia has been very strong lately. The company reports results next week, so I guess we will find out. An increase above $48 opens a path to $52.

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Boeing (BA)

Boeing did not have a good day, either. Support will come at $144, and after that, maybe $127.

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