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A trading plan on MicrosoftOn its earnings report today, Microsoft reported better-than-expected earnings and guidance, but issued first-quarter revenue guidance slightly below the Wall Street consensus. The poor revenue guidance was partly, but not completely, offset by slightly better-than expected guidance for first-quarter operating costs. Overall, the magnitude of the earnings beat was much greater than the magnitude of the guidance cut, and my valuation metrics on Microsoft improved today: PEG dropped from 9+ to about 8.76. Microsoft is still certainly overvalued, however, along with the rest of the FAANG+ stocks. It's about 30-40% above the top end of its traditional range in terms of forward P/E and P/S. For a long-term buy-and-hold play, I would want to see Microsoft drop all the way to my second volume support before I'd want to buy. In the short term, Microsoft sentiment still looks pretty good. Options traders are net bullish in their positioning, and the Starmine Equity Summary Score for MSFT is 9.9. ESG has mattered a lot lately, and Microsoft earns one of the best ESG ratings I've seen. Thus I think we'll probably see a bounce from 203 either tomorrow or, more likely, Monday or Tuesday next week. A swing trade over the weekend might be a winner as the market holds out hope for vaccine and stimulus news. In macroeconomic terms, we saw the "recovery" story start to change today. Initial jobless claims turned upward for the first time in 16 weeks. Lots of other indicators I watch are also starting to look a little more negative. Thus, we may be headed into a period of renewed market weakness until the South and Midwest successfully flatten their coronavirus curves and resume reopening their economies. I highly doubt we'll drop all the way to that lower volume support at $135 unless the Moderna, Pfizer, and Astrazeneca vaccines all fail in clinical trials, but a dip to the upper support around $183.50 in August or September after stimulus news fades may not be out of the question, and from there it'd be worth swinging for a bounce. I will target a small entry at $183.50 and a 3x larger entry for $135, contingent on macroeconomic news.
NASDAQ:MSFT
by ChristopherCarrollSmith
8
FNGU ChannelThis is the FNGU ETF at the 4 hour. It's a 3x leveraged ETF for mainly big tech. Well, FATMANG stocks make up over 40% of the NQ - possibly more by now. This is one of my favorite ETFs to swing trade and scalp. The channels are aligned with the NQ channel that I published. FNGU found support at the middle of its channel... just like NQ. I am not sure how far this bounce will be. NQ can make great gains, but the weak breadth makes rallies hard to sustain. This is why I am waiting for the NQ to reach a major support. As you can see with FNGU, you can lose a lot in one day. If you wait until major support, you can serious bank the big bounces. The last big bounce increased the FNGU by over 60% within 2 weeks. I am not a financial advisor. However, I would not recommend holding this ETF for long periods of time. 1-5 trading sessions at most. If you want to mitigate your risk, just scalp it.
AMEX:FNGU
by Itsallsotiresome
StockMarket Update : Bubble Reaching a Possible Momentum LimitHope this idea will inspire some of you ! Don't forget to hit the like/follow button if you feel like this post deserves it ;) That's the best way to support me and help pushing this content to other users. Kindly, Phil Code used for marketcaps : // This source code is subject to the terms of the Mozilla Public License 2.0 at mozilla.org // © PRO_Indicators //@version=4 study("Top5 Cap") cap(asset) => tot_shares = financial(asset, "TOTAL_SHARES_OUTSTANDING", "FQ", barmerge.gaps_off) tot_shares * security(asset, timeframe.period, close, 0, 1) top5 = cap("NASDAQ:AAPL")+cap("NASDAQ:MSFT")+cap("NASDAQ:AMZN")+cap("NASDAQ:GOOG")+cap("NASDAQ:FB") plot(top5)
CME_MINI:ES1!
by PRO_Indicators
6
Distortion & misallocation & wealth transferThe chart says it all. 3 trillion increase in balance sheet in 2 or 3 months... Party will go on as long as the long-term interest rate remains low... Distortion - The massive rally has been partially fueled by $l8 trillion worth of fiscal and central bank stimulus. Short-term lending rate cut to near zero and long-term interest rates dropped to near all time low caused by massive QE. Massive QE has distorted the interest rate so that the cost of capital is kept artificially low to the point that company is justified to undertake many projects that would not yield any productive return under the normal circumstances Evolution of Fed's QE - Treasury/municipal bonds-> corporate bond ETF-> individual corporate bond-> Yield curve control (in potential development)-> Maybe... Individual stocks in the future... Even though Fed's purchase of individual bonds and ETF accounted for just a small percentage of overall bond market, I can't help but wonder why the Fed included lower-medium grade/slightly speculative bonds and bonds issued by financially healthy companies such as AT&T, UnitedHealth Group, and Walmart ?... to name a few. Easy credit has undoubtedly kept some zombie company afloat when it is probably better for them to die off. QE and forward guidance have resulted in high commercial bank deposits. Fortunately, as long as the circulation of velocity remains low and producer can keep up with the demand of good and service, the economy will not overheat. Misallocation of capital - It is no surprise that American household's wealth is increasingly tied to stock market & real estate. As a result, there is a negative correlation between household wealth and interest rate. The increased household consumption that results from the perceived gain in the stock market & real estate driven by low interest rate is the main culprit of chronic trade deficit. Oh yeah, FAANG now collectively accounts for roughly 20% of top stock marketcap... If it does not convince you that stock market is overvalued, just look at the ratio of total market cap over GDP (currently at 147.2%) and Shiller PE which is 13.1% higher than the recent 20-year average of 25.8. Wealth transfer - Pension fund, endowment, mutual fund and hedge fund are having a field day. Maybe just a handful of investment groups are dictating the movement of the market. BlackRock alone has more than 7 trillion of AUM. Goldman Sachs, Bridgewater and few other investment groups also each controls more than hundred billions of asset. It is hard to image that the quick reversal in the market is caused by a bunch of retail investors and traders panic sold in March, then immediately FOMO back into the market only a few weeks later.
TVC:SPXEducation
by Libratus
4
Falling star candlestick suggests QQQ may pull backThe technology-heavy Nasdaq index has been greatly outperforming the S&P 500, as investors flee to the relative safe haven of technology stocks. However, tech stocks have gotten fairly expensive, and it's hard to see more investors piling into companies like Apple or Microsoft as these companies close their retail locations. I think tech will continue to outperform other sectors like banks, travel, and energy, but it's still probably due a good 10% pullback from here. In terms of technicals, we got a falling star candlestick on the weekly chart and what looks like a fairly large bearish divergence. The daily chart also shows bear divergence: Tech might return to strength during the mid-July earnings season. Tech companies tend to outperform analyst earnings expectations, and early guidance has so far looked good. Meanwhile, there could be slaughter in other sectors as companies loaded with debt offer weak guidance for the year ahead. Thus, I will treat a Nasdaq pullback in the next two weeks as an opportunity to buy into earnings season. I'll probably focus on some tech sector-specific ETFs like SOXX and EWCO.
NASDAQ:QQQ
by ChristopherCarrollSmith
3
AMZN - Will the divergence be effective?Hello Everyone! Amazon stock is among the ones have benefited more during the pandemic, price is up 50% since the bottom in March and divergences started to appears in many timeframes from 1H to W. I expect the divergence will be effective perhaps sooner than later, despite the strong uptrend, and price to retrace below its 50 sma, likely to hit the previous resistance area of 2170-2180 which could act as support. At level 2180 there is also the 38,2% Fibonacci retracement. If that will happen I'll be ready to take this occasion to add more shares as AMZN continues to be one of the fast growth stock of SP500. Post your comments if you like and.... may the market be with us...!
NASDAQ:AMZN
by Carlopiranha
FB - Third attempt ?Hello Everyone! we have left FB after a double top at 241 area and a RSI divergence on the daily chart, what has happened this week ? The divergence is still in place and the price seems has built energy for a new attempt to area 241 as the lower price of the retracement of 11th June has not been overcome. Let's see if the price will break new highs or will be again rejected. Bullish scenario than, unless we will see a daily close below that low of the candle of 11th June, at 223,55. A close below that low would likely start a bearish scenario. Thanks for reading and leave a comment if you like to do that....and may the market be with us!
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by Carlopiranha
3
GOOGL - Rejection?Hello Everyone! We have left GOOGL ready to break resistance at 1440 and fill the gap at 1478 but see what happened : price has bounced on 20 sma and break resistance, but in the end the high of the candle of 10th June was 1472....than it came back and didn't fill the gap....in my opinion this is a short term bearish signal. Yesterday Nasdaq was down 5,01% and GOOGL 4,29% breaking below its 20 sma quite easely, even if today the pre-market shows the possibility of a recovery, we have to consider that after a down day lake this is unlikely not to see new down days, than we have to be prepared that the price will possibly find a sort of support at 50 sma or lower around 38,2% Fibonacci level at area 1290 which was previously resistance, this in case the market will continue in south direction. A bounce at 50 sma will open the case for a new bullish leg. Feel free to post a comment below if you like and...may the market be with us....!
NASDAQ:GOOGL
by Carlopiranha
FB - Are we seeing a double top?Hello Everyone!. NDX first close above 10000 points, Facebook is now at its high, but...what do we see looking at the chart? Is this a double top? High of the day at 241.20, previous high at 240.90, the question coming up to my mind is it might be an area where the price has been already rejected two times and might retrace towards 20 sma to breath in before another attempt to this area. Aldough price action is extreamely bullish (higher highs and higher lows plus 20 sma and 50 sma sloping up), meantime RSI is signaling a potential bearish divergence. Let's watch closely the developement, post your comments if you like to do so and...may the market be with us...!
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by Carlopiranha
1
Is GOOGL ready to fill the gap?Hello Everyone! Is GOOGL ready to go higher breaking the resistance at 1440 and fill teh gap at 1478 left open on 21st Feb ? Bouncing on 20 sma as did in the recent past, price has not touched the upper Bollinger Band during latest days, with RSI not yet overbought seems to have the cards to go higher in the short term, considering that among FAANG is the stock that is more far from its all time highs. Price action remain strong since bottoming last March, with a serie of higher highs and higher lows. Post your comments if you like and....may the market be with us!
NASDAQ:GOOGL
by Carlopiranha
FAANGs - What Lockdown??? - Reflation TradeWhat you are looking at is an equally weighted 'portfolio' of all the FAANG stocks, ~FB ~AMZN ~AAPL ~NFLX ~GOOGL And what the performance would have looked like if you had put an equal dollar weighted amount into each, at the earliest point you were able to, i understand that this is impossible to time or predict, but what it does do, is it serves to illustrate just how skewed the overall market performance is, when you analyze the best performers. In terms of drawdown during the global lockdown? Minimal, in terms of peak to trough move, the global lockdown did not measure above a slightly above average drawdown, in fact, the drop in 2019-2019 was more severe, at a 36% drop, versus the 27% drop experienced recently. What is more interesting is that the lockdown, if anything is allowing these already MASSIVE companies to gobble up even more of the market share, when compared with the real economy (i.e. small/ mid-size business) In fact, YTD, the FAANGs are UP close to 27%, versus the Russell 2000, which more closely represents smaller sized businesses, which is DOWN close to 21.5% I find this to be slightly troubling, because the FAANGs are not all stocks you would expect to boom during the global lockdown. Yet, they are all doing extremely well, compared with the broader market. Here are 4 of the 5 FAANGs (FB, AAPL, NFLX, GOOGL) Here is AMZN As you can see, both GOOGL and FB are both doing VERY well, considering they are predominantly advertising platforms for businesses...you know, the businesses that are shutting down in record numbers, furloughing staff and cutting hours. I assume that this surge in stock price has nothing to do with the Fed liquidity hose and is all to do with savvy business owners all seamlessly switching to an online E-commerce business model. AMZN and NFLX are no surprises, these are the quintessential 'stay-at-home' bet, so i am not surprised at their relative out-performance. AAPL is no real surprise either, simply due to the overwhelming size of the company, as well as the generally healthy balance sheet (a couple hundered billion of cash laying around doesn't hurt either to boost investor confidence). I will close with this, prior to the market crash and global lockdown, these same stocks were being derided by many for being fundamentally overvalued, add in a global lockdown and a few trillion in stimulus and here we are. The lesson is...do not underestimate how irrational a market can be...trade what is actually happening...not what you THINK should happen... Clearly, the reflation trade is on. -TradingEdge
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by Profit_Link
2
NDX - Potential Gap Fill? - Time to be VERY careful nowMarkets are anything but boring, idiotic perhaps, but not boring that's for sure. The Nasdaq is just shy of 7% from the prior ATH, despite the fact that the economy has still NOT reopened, many small businesses are in tatters, large business are hat in hand to the Fed and Treasury for bailouts AND north of 30 million Americans are unemployed. Initial Claims: So how do we play this market? Carefully...very carefully... The Nasdaq could very easily fall away from here, hitting it's head on the 78.6% fib retracement, mind you, this WOULD NOT invalidate the latest move higher, crazy as it may seem. Should the Nasdaq fall away from here i would expect to see support show up at the 38.2% fib level, currently around the 8,200-8,400 mark, this would also coincide with a nice potential gap fill around the same area. Nasdaq potential trajectory to the downside: BUT, this is largely going to be dependent on how the 'cream' of the crop perform, namely the FAANG stocks (FB, AMZN, AAPL, NFLX, GOOGL). Which recently have shrugged off any concerns about a potential global depression and have in fact make new ATHs. FAANG stocks make new ATHs: What to look for? ~Should we see TWO closes above the 78.6% fib retracement, then the odds are more skewed towards the bullish case for a gap fill at the 90 fib level or even a retest of prior highs. ~ If however we head lower, say two closes below the 9 ema, then i would begin to favor the bearish case to 8,200-8,400 more. Lending credence to the bear case is the rather neutral/ bearish RSI reading at the moment is a good gauge of potential direction, which at press time is NOT confirming the latest moves higher. In any case, I do firmly believe that the markets WILL head lower soon, BUT the fact that the 'obvious' path is down, leads me to believe that we may well be looking at one of the greatest bull trap in recent memory. -TradingEdge
TVC:NDQ
by Profit_Link
SPY - Top 10 Holdings - Compared with Overall MarketHere we have the top 10 holdings within the SPY ETF, ~ MSFT ~ AAPL ~ AMZN ~ FB ~ BRK.B ~ GOOGL ~ GOOG ~ JNJ ~ JPM ~ V These represent 25.23% of total assets within the ETF, by combining them we are able to get a gauge of what the market movers are doing compared with the entire index. The first thing you will notice is the difference in retracement levels, between the top 10 and the broader market, this is not surprising, but it is interesting. For the top 10, we are sitting just shy of the 78.6% retracement, whereas the broader SPX is just shy of the 61.8%. The second thing you will notice, is when the chart scale is measuring percentage gain, the top 10 are actually doing VERY well relative to the broader market. This difference is even clearer when a baseline chart is used. I have also done the same thing with the FAANG stocks (FB, AMZN, AAPL, NFLX, GOOGL). Look at that! If you ignore that pesky "real economy" we are back at all time highs! The difference between the curated FAANG stocks, the top 10 and the broader SPX is quite startling A better lesson in why "diversification" is just a tool to part fools from their cash, i have yet to see. The other observation i can see, is that both the FAANGs, the top 10 and the broader SPX are all looking a tad extended, the FAANGs have gap filled and have put in a rather ordinary looking closing candle. The top 10 is just shy of gap filling and appears to be struggling a little at the 78.6% and the SPX looks like it might be able to get to the 61.8, but will likely struggle from there. Overall, i am expecting to see some more potential strength, but only marginally, before either the markets enter a more choppy condition, or they roll over and look to retest their prior lows (SPX that is). In any case, all three markets from the "cool kid" FAANGs to the "above average" top 10 to the "bastard stepchild" SPX are looking like their relief rallies are a little long in the tooth, that being said, with the Fed printing and propping up these markets, a melt-up is not off the table and is a scenario i will be watching carefully. -TradingEdge Sources: finance.yahoo.com
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by Profit_Link
2