Stocks had another weak session Wednesday, with the S&P 500 falling by 55 bps, but it was more than 1.3% off its high of the day, so it was a big Intraday reversal. Meanwhile, the Qs finished the day lower by almost 1.7%.
The selling pressure has been fierce late in the day more recently, and I’m not sure if this is part of the quarter-end rebalancing or there is something more at play here. Regardless, things could start to get ugly, especially for some of these overvalued technology “disruptors.”
NASDAQ Qs
If the Invesco QQQ Trust (NASDAQ:QQQ) falls below support at $310, it will quickly send the ETF back to around $300, filling a gap from Mar. 9. However, that may not be enough because the RSI isn’t even close to being oversold yet, and volume levels are still strong. Is a drop back to $275 possible? Well, if we drop below $300, we will find out.
S&P 500
There was still a gap that needed to be filled in the S&P 500 at 3,830, and if that happens, the long-term March uptrend will break for a second time, and I don’t think good things follow.
Because the damage has been done, yields have risen, and spreads have widened dramatically. That was strengthening the dollar, and that with all of the other disruptions in the world will help the dollar continue to strengthen. That will be a big problem for many asset classes, and it will most certainly kill the reflation trade. Even if yields begin to drop some on the 10-year, they are not going low enough to boost technology anytime soon.
Biotech
Risk-on has turned off, and biotech is the best example of risk in the market. The SPDR® S&P Biotech ETF (NYSE:XBI) was down more than 25% in the past month, and it probably isn’t finished falling. It hasn’t even hit oversold conditions yet, which means the trend isn’t even close to reversing.
Bitcoin
Another risk-on play has been Bitcoin, and that looks like the uptrend has broken. This will really be interesting to watch. My view on bitcoin is not favorable.
Micron
Another brutal day for Micron (NASDAQ:MU) as the stock fell below support around $86, and there could even be a double top pattern in the stock. If that is the case, then $74 is probably only the start of the decline, with $58 or $50 on the board.
Roku
Roku (NASDAQ:ROKU) fell hard on Wednesday, resting on support at $318. I don’t think this is a retest of the low on Mar. 8, I think it has even further to fall, probably back to $275.
Zoom Video
I’m so tired of Zoom (NASDAQ:ZM), just break down and go to $275 already, we know its coming.
Teladoc
So when Teladoc (NYSE:TDOC) falls below $180 does it stop at $150 or go straight to $87?
