Stocks finished the day, higher with the S&P 500 up around 30 bps. Yesterday was the opposite of Wednesday, with the Equal Weight index outperforming and rising by 75 bps and the NASDAQ 100 finishing down by approximately 15 bps. Yields on the front of the curve fell and increased on the back end, with spreads widening. That, along with more dollar struggles, sent everyone into the value equities.
S&P 500
The S&P 500 made it back to the February trend line and pretty much stopped at that point. We gapped below that trend on Sept. 17 and have now risen back to it. At this point, the bulls need to gap over that trend line tomorrow to keep the rally alive. If the trend in the market has shifted to one that is lower, then this recent move up is simply a retest of that breakdown.
If we start heading lower and then fall back below 4,430, I would look for the lows of early October to fall.
Tesla
Tesla (NASDAQ:TSLA) reported a big beat on the top and bottom, with gross margins coming in 30.5%. A solid quarter. I guess the question is if it was strong enough. The stock did nothing after hours. There is a rising wedge on the chart, complete with a spillover, along with an RSI at 78. I don’t think the beat was big enough to push the stock higher.
Lam Research
Lam Research (NASDAQ:LRCX) reported better than expected results on the bottom line but missed revenue. Guidance was in line with estimates as well. Lam is potentially an interesting stock to watch because of its role in the semiconductor space and its implications for the rest of the group. The chart is not encouraging at all, and the stock needs to hold support at $543.
Have a good one.