There will be a lot of market-moving data this week, with the manufacturing PMI, non-manufacturing PMI and job reports. These will have significant impacts on rates, and the movement of the dollar, which in turn will push commodities and the equity markets around.
At this point, the S&P 500 is significantly overbought and overextended on the RSI and even Bollinger bands. It seems like there still maybe a little bit more to come to the upside, with 3,527 acting as the next level of resistance, and the potential for an increase to 3,590. But based on the those RSIs and Bollinger bands, we really should be turning lower at any point. Given how this market has no quit in it, we still need to be mindful of potential resistance levels should it continue to push higher.
S&P 500 Index Daily Chart
NASDAQ 100
The QQQs are also overbought, and they are inflicting a ton of pain on me because I bought puts on August 21, and it has been nothing but up. I noted this week that the Qs had been contained to this trading channel since late April. But I also mentioned in a midday commentary that it is possible the channel is widening and forming a megaphone pattern, based on two outliers on June 10 and July 13. If the pattern is widening, then there is a chance the Qs push up to around $301. The downside risk is still at the lower end of the channel, about $272.
QQQ Daily Chart
NETLIX
It seems options traders are even getting rattled by the unpredictable nature of this market, which appears to defy a lot of logic. On Thursday, there was a straddle in Netflix (NASDAQ:NFLX) put in place, suggesting the trader profits in either direction, but the stock needs to be below $424 or above $586 by the middle of October. Talk about uncertainty.
Netflix Inc Daily Chart
AMAZON
It would seem there is a giant short-seller of Amazon (NASDAQ:AMZN) out there, based on a considerable risk reversal options trade last week. I have been looking for this one to fall to around 2,800 for some time. Lucky for me, the stock hasn’t done much since the middle of July.
Netflix Daily Chart
SALESFORCE
Salesforce’s equity trading desk had a fantastic quarter and that helped to push the stock up by over 25%. The chart doesn’t tell us much other than the fact it probably went up to much on a huge earnings beat that was not what it seemed.
Salesforce Com Inc Daily Chart
ACADIA
The market is not happy with everything happening for Acadia at the moment. The stock has fallen nearly 40% in a vertical market, not a good sign. The stock needs to hold the uptrend around $36, for a chance of a gap fill down the road up at $55.
Acadia Chart
PFIZER
Finally, I saw some bullish betting in Pfizer (NYSE:PFE) this week, and it seems like the stock is retesting a break on its way higher towards $42.
Pfizer Inc Daily Chart