|Day's Range||27.67 - 27.67|
U.S. markets and stock ETFs paused their record rally on Friday after President Donald Trump stated that he had not agreed to any tariff rollbacks. On Friday, the Invesco QQQ Trust (QQQ) was up 0.1%, SPDR Dow Jones Industrial Average ETF (DIA) fell 0.1%, and SPDR S&P 500 ETF (SPY) was flat. “Until we actually see some type of trade deal, the level of uncertainty—which ultimately will translate into volatility in the market—will persist,” Brian O’Reilly, head of investment strategy at the Dublin-based Mediolanum International Funds, told the Wall Street Journal.
Invesco QQQ Trust (NASDAQ:QQQ), an ETF designed to track the large NASDAQ stocks, has rallied big time over the past month. QQQ is now up nearly 10% since making recent lows in early October. It also just traded above $200 for the first time ever.Source: Shutterstock Some of the recent moves higher may be justified given the recent Fed rate cut. The red hot rally, however, has come too far, too fast. Now that momentum has slowed, an overbought and overvalued QQQ is due for a pullback. * 7 Under-the-Radar Retail Stocks to Buy Now Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL) account for roughly 40% of the overall QQQ. These Four Horseman of the NASDAQ have all reported earnings with decidedly mixed results. Apple had a solid, if not spectacular report. Microsoft beat on both the top and bottom line but guided lower. Amazon and Alphabet both had big earnings misses.InvestorPlace - Stock Market News, Stock Advice & Trading TipsYet all of these stocks are now higher post-earnings. In the case of AAPL, and maybe MSFT, that makes some sense. The fact that Amazon and Alphabet are higher makes no sense at all, especially given how bad the earnings reports were. Both of theses stocks initially sold off sharply post-earnings but have since recovered all the losses and then some. Earnings will matter and momentum will ultimately end, perhaps in a not-so-pretty way. QQQ Stock ChartsThe current P/E ratio for QQQ is nearing a rather robust 26. This is a big expansion to the 23 multiple from a year ago. Both Apple and Microsoft now have a market cap over a trillion dollars, with Amazon and Alphabet not far behind. Growth rates for these giants will be hard to maintain simply due to the law of large numbers. The combination of higher valuations in the face of slowing growth means that P/E multiples will by necessity have to begin to contract. QQQ will likely head lower. Click to EnlargeThe technicals are getting to extremes as well after breaking out past the $195 level. 9-day RSI breached the 70 level which has signaled a short term top in the past. MACD also reached a recent high before weakening. QQQ is trading at a large premium to the 20-day moving average as measured by the Detrended Price Oscillator. Previous instances when this occurred proved to be a prelude to a pullback.More importantly, the price action yesterday finally gave an indication that the rally may be ending. QQQ traded up to fresh new all-time highs at $201.72 before pivoting to close off the highs at $200.43. This type of reversal pattern is indicative that a short-term top is in place. It is especially powerful following such a strong rally. The buyers may finally be exhausted and the sellers have taken charge. Click to EnlargeThe VXN, a measure of NASDAQ stock implied volatility, is at recent lows. This is usually a reliable contrary bearish indicator that signals an overly complacent market.The last time VXN was at similarly low levels was late July, right before QQQ suffered a serious pullback. It also marked a 3-month top for NASDAQ stocks. Look for a similar scenario to unfold soon.Stock traders should look to short QQQ on any strength. The initial downside target would be a pullback to the convergence of the 20-day moving average and breakout level at $195. A continuation of the rally past $205 would be a viable stop out area.Option traders may look to take advantage of the low levels of implied volatility to position for a pullback with a comparatively cheap diagonal. Buying the December $200 puts and selling the November $197 puts would cost $3.25. Maximum risk is $325 per spread. Ideally QQQ closes near $197 at Nov. 15 option expiration. The trade structure also allows additional selling of weekly options versus the long December puts to further reduce the initial cost if needed.Tim Biggam may hold some of the aforementioned securities in one or more of his newsletters. Anyone interested in finding out more about Tim and his strategies can go to https://marketfy.com/item/options-and-volatility. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Sell Before They Roll Over * 5 Beaten-Up Stocks to Buy That Could Be Saved By An Acquisition * 4 Startup Stocks Getting Smashed The post QQQ Just Passed the $200 Level -- Time to Short It appeared first on InvestorPlace.
U.S. markets and stock ETFs rallied Thursday as investors gained confidence on signs of progress in the U.S.-China trade talks. On Thursday, the Invesco QQQ Trust (QQQ) was up 0.7%, SPDR Dow Jones Industrial Average ETF (DIA) gained 1.0%, and SPDR S&P 500 ETF (SPY) rose 0.5%. All three major benchmarks were trading at record highs on a resilient U.S. jobs market, hopes that the U.S.-China trade deal is progressing and upbeat corporate earnings, the Wall Street Journal reports.
U.S. markets and stock ETFs maintained their momentum Tuesday on hopes that the U.S. and China could begin rolling back tariffs in a bid to de-escalate a protracted trade war and sign an initial truce. On Tuesday, the Invesco QQQ Trust (QQQ) was up 0.2%, SPDR Dow Jones Industrial Average ETF (DIA) gained 0.3%, and SPDR S&P 500 ETF (SPY) was flat. Investors were hopeful that Washington and Beijing could roll back tariffs as part of the "phase one" pact before President Donald Trump could impose new tariffs scheduled for December 15, the Wall Street Journal reports.
On Monday, the Invesco QQQ Trust (QQQ) was up 0.7%, SPDR Dow Jones Industrial Average ETF (DIA) gained 0.4%, and SPDR S&P 500 ETF (SPY) rose 0.5%. “The sentiment between the two parties has improved from the lows, so we don’t seem to be on the path of semi-permanent escalation,” James Athey, senior investment manager at Aberdeen Standard Investments, told the Wall Street Journal. Further adding to the optimism, Commerce Secretary Wilbur Ross revealed that licenses allowing U.S. companies to sell components to China’s Huawei Technologies Co Ltd would come in “very shortly”.
Each of the yellow buy columns below represents a sector seeing unusually large buying. The slaughter of software seems to be over for now, and tech is seeing continual buying in semiconductors and hardware. Elsewhere in the sectors, every sector save consumer staples and energy saw huge buying.
U.S. markets and stock exchange traded funds rebounded Friday as a strong jobs report and upbeat data out of China assuaged fears over economic growth. On Friday, the Invesco QQQ Trust (QQQ) was up 0.6%, SPDR Dow Jones Industrial Average ETF (DIA) gained 0.9%, and SPDR S&P 500 ETF (SPY) rose 0.8%. According to the Labor Department, data showed the U.S. economy added 128,000 jobs in October, beating out expectations for an addition of 75,000 in payrolls, the Wall Street Journal reports.
Do the recent headlines feel like a conducive environment for stock market values to break out to new all-time, record highs? Continue reading...
Apple encouraged investors with robust fourth-quarter fiscal 2019 results, wherein it topped both earnings and revenue estimates and offered an upbeat holiday quarter outlook.
Fed Chairman Jerome Powell said the Fed is not thinking about the composition of its balance sheet, as it remains pre-occupied with figuring out the proper size of its balance sheet.
The S&P 500 notched a new record closing high on Wednesday. U.S. markets and stock ETFs advanced late in the day after the Federal Reserve cut interest rates again but signaled it will hold off any more monetary policy changes for the rest of the year. The Dow Jones Industrial Average rose 116.83 points, or 0.43%, to 27,188.25, the S&P 500 gained 10.04 points, or 0.33%, to 3,046.93 and the Nasdaq Composite added 27.12 points, or 0.33%, to 8,303.98, reports Reuters.
On October 25, George Soros weighed in on the 2020 election. He told the New York Times that Elizabeth Warren is the "most qualified to be president."