Stocks surged on May 16 by about 0.90%; however, they had been up more, with some of the gains fading away. One can only wonder if some of the late day selling we have seen recently is due to “tweet anxiety?” Who wants to be long the market overnight with the potential for a tweet to come at any moment. Apparently plenty.
Still, the showing was strong, and all of the losses from earlier in the week have pretty much been wiped out. It may be premature to say it, but to this point, the market has been relatively resilient in the face of the negative headlines this week. A more fragile market could have easily continued the path lower following Monday’s steep plunge. However, at least for now there are signs that the rally can continue.
Will the tariffs hurt the economy? The consensus, at least based on my reading, says yes. The question I have is by how much and does it make a difference in the long-run. I think that is the big question. Again, it depends on many variables, which make the situation very dynamic.
Currency
The Chinese yuan looks like it is getting ready to devalue some more tonight. There is that big bullish flag pattern that has formed in the chart, and I think that indicates the currency is on its way to 7.
Rates
Interestingly the 10-year appears to have tested March’s low around 2.35% and has managed to rebound some following that early morning drop. However, 2.42% seems to be the line in the sand for now, and the trend continues to be overwhelming bearish for yields.
Stocks
S&P 500
The significant level to watch for in the S&P 500 is around 2,890. As of now, that level is acting as a resistance level, and until we rise above it, it is tough to say we are in the clear. A rise above 2,890 likely setups a move to around 2,915. However, for now, that 2,890 area is proving to be a challenge with the S&P 500 closing around 2,870. It is easy to see the big turn in prices towards the end of the day.
Cisco
Cisco Systems Inc (NASDAQ:CSCO) managed to rise today following its results crossing resistance at $55, the next level to look for $57.25.
Amazon
Amazon.com (NASDAQ:AMZN) had a solid day rising back above $1,900. The stock broke a short-term downtrend, which is a big positive. It sets up a potential for the stock to retest $1,960.
PayPal
It looks like PayPal (NASDAQ:PYPL) did break out today. Perhaps it can rise to around $125.
AMD
AMD (NASDAQ:AMD) stock appears to be potentially finally breaking out. The stock is rising above the upper end of what seems to bull flag, a continuation pattern. Should the stock continue to increase then, $29.40 is the next potential level to watch.
Nvidia
Finally, NVIDIA (NASDAQ:NVDA) reported better than expected quarterly results beating on both the top and the bottom lines. Meanwhile, guidance at the mid-point came in $2.55 billion versus estimates of $2.53 billion, slightly better. The stock is popping to around $170 in the after-hours session.
You can’t argue with the beat, a beat is a beat with earnings of $0.88 vs. estimates for $0.81, while revenue was better at $2.22 billion vs. $2.2 billion. But datacenter, which was at one time the shining star for Nvidia was down not only sequentially, but year over year. Something we haven’t seen before, and I’m surprised the market is not worrying about that more.
Anyway, for now, there is a downtrend and resistance comes around $178.
I tried, I can’t be right all the time.