Guy and I hope you had a great weekend. We are back with The Set-Up this morning where we discuss this morning’s early strength, the slew of mergers (NVDA/Arm, GILD/IMMU, and ORCL/TikTokUs), Apple’s iPhone event, Pfizer CEO’s vaccine comments over the weekend, and their upcoming analyst day. We also previewed the Fed’s last meeting prior to the election and what if anything the Fed chair is likely to say that differed from his Jackson Hole comments of two weeks ago, prior to the start of the recent stock market weakness.
Click below to watch:
Let’s go to the charts:
The SPX approaching its Feb high could be near-term resistance:
The Nasdaq 100 (QQQ) has room to the uptrend from the March lows, but I suspect that will serve as important near-term technical resistance near $285:
If you could not tell from my commentary over the last few weeks, I am starting to like the look of the Bank stocks, particularly their relative strength, and the closer we get past Q3 earnings in mid-Oct is the sooner we will have clarity on just how high their loan loss reserves taken this year are relative to their losses. And everyday closer to a vaccine in 2021 makes it more likely that investors will be net buyers of the laggard bank stocks as opposed to sellers for much of this year:
AAPL at its lows on Friday was down nearly 19% from its Sept 2nd all-time high. Tomorrow’s iPhone event could determine the stock’s next 10% move. I suspect the phones will be great, the price tag for 5G will be high, the release staggered throughout the fall. We discuss but I would not be surprised to see AAPL fill in that earnings gap back towards $95 in the coming weeks which would market a 31% peak to trough decline, which the stock has had four of at least that much since 2012:
ORCL won the TikTok-Stakes, but do they know what they are getting? Investors sold the gap on Friday after their earnings, and prior to the stock being halted this morning they sold the 10% pre-market gap. I like the stock in the mid to high $50s as long as they did not pay way too much for way too little. Guy sees this chart as the mother of all double-tops:
PFE has its analyst day tomorrow, it’s first in a decade. I previewed it Friday (here). The slightest bit of good news and this stock is up 10% back towards its downtrend having just bounced off of support at its uptrend:
NVDA’s nearly 10% gap this morning essentially validates and pays for their deal for Arm, but I could see another near-term retest of the uptrend near last week’s lows, and if it breaks, watch out below:
GILD’s $20 billion deal for Immunomedics (IMMU) sounds a bit expensive, but with the stock so oversold, any news is good news?