Stocks had a very lopsided day yesterday, with the S&P 500 dropping by around 1%, while the NASDAQ fell by nearly 2.7%.
The growth stocks got hit the hardest, while the reflation names had some big intra-reversal. Overall, Monday was not a pretty day, with many big reversals throughout, not just in stocks, with copper marking a big reversal lower, at time of writing.
For now, the 5-wave count I pointed out on Sunday stands and based on that, I would think the index could finally make that push back to 3,960 we spoke about a month ago.
Copper
The copper reversal was notable, especially after a big run-up. It is the type of price action you see at the end of a run higher. Copper has certainly had a big run higher, and a drop back to $4.50 certainly doesn’t seem unlikely.
Freeport
Freeport-McMoran Copper & Gold (NYSE:FCX) was one of the stocks that had a big reversal yesterday, after gapping higher. It left the stock trading below support at $43.60. Given the big reversal, it would not be surprising in the least to see the stock reverse lower towards $39.
Amazon
Amazon.com (NASDAQ:AMZN) came to a crossroads as it approached its 200-day moving average. This could be a big turning point for the stock, as a break of the 200-day moving average would certainly be a long-term momentum breaker.
It has already tested this level once and survived; the question is if it can do it again? The only difference is that this time, the 50-day and the 200-day meet to form a death cross.
The selling has come on strong volume.
Micron
Micron Technology (NASDAQ:MU) was hit hard Monday too, falling by almost 6%. The stock is probably now on its way to $74. I have been waiting for $74 for a while; maybe this time, it finally happens. The RSI says there is further to fall.
JD.com
JD.com (NASDAQ:JD) has to hold support at $67.30 to avoid a bigger meltdown. The death cross was in play with the 50-day crossing over the 200-day.
