Markets entered freefall yesterday as the Nasdaq led the collapse falling 4% to its lowest point of the year.
Year to date figures are as follows:
- Dow Jones Industrial Average -8.5% YTD
- S&P 500 -12.4% YTD
- Russell 2000 -15.8% YTD
- Nasdaq Composite -20.2% YTD
Tesla (TSLA^) fell more than 12% as investors’ concern about the Elon Musk / Twitter (TWTR^) deal rises. TWTR stock is trading more than 8% below the agreed-upon buyout price of $54.20 per share.
Microsoft (MSFT) and Alphabet (GOOG/GOOGL) reported earnings after the bell. MSFT rose about 5% while GOOG/GOOGL each fell about 3%.
Although the outlook doesn’t appear great at the moment I’m not willing to place a bearish bet … yet.
The rubber band is stretched out nearly as far as it can go…
Looking at the past 20 years the number of stocks trading below their 200-day moving average has only sunk lower a handful of times.
And after each bottom, there is a steep rally.
So while the market can always go lower. There’s limited downside left in my option.
At the close yesterday the S&P 500, Nasdaq Composite, and the Russell 2000 had all reached oversold RSI levels.
The put-to-call ratio remains oversold.
A bounce, even if it’s a dead-cat, is overdue…
The morning futures are up.
We’ve reached the end of the best six months…
For that reason, I’m being less aggressive and only expanding my longest-term positions.
I’m buying AbbVie (ABBV^), TSLA^, and Enterprise Products (EPD^) as part of my long-term (10+ year) strategy.
*BLBX has support at $4
^CYN has support at $3
NKTX is on watch
SGML has support at $15
TCDA has support at $11
^VERU has resistance at $14
^REI has support at $4
CXW has support at $12