The Shakedown 5/25/20

LAST WEEK, S&P 500 (+3.20%):

Monday: +3.05%

Tuesday: -1.03%

Wednesday: +1.70%

Thursday: -0.69%

Friday: +0.19%

The market opened this week up with over a 2% gap to the upside. We held that gap all week, but didn't do much else from a price standpoint in the S&P. The Nasdaq continued to lead markets higher as this market appears that it has no sign in slowing down.

A great sign for the continued uptrend that we saw this week was the broad market shaking off any fears of US & China tensions. We have been seeing them ramp up once again, however the headlines aren't negatively affecting the markets price action like they once did. There is a big tell in that information, and it is how strong the underlying bid in the market is. Most often, when a market has a big Monday morning gap, whether it be to the upside or downside, that gap is generally filled as we can see the lack of gaps in the weekly chart. The fact we couldn't even fill Monday's gap, and held that micro-support area all week, showcases the market strength.

Chinese stocks have added an extra layer of risk-premium with the notion the US is looking to have those companies put under the same public accounting scrutiny that all US Companies face when looking to trade on these exchanges. There are rumors and meddlings saying the Chinese will take their companies off our exchanges, as the US leaders posture in a similar fashion. I don't want to have that type of risk to worry about.

Until we see a dramatic shift in price action, the trend is our friend.

Earnings Season Rolls On

Click the above picture for a full list of the companies reporting this week

Big week for Software names as many of the sector leaders report this week:

WDAY, PLAN, VEEV, VMW, ZS, OKTA to name a few

PKI Long

This PKI is sporting a beautiful earnings flag with tight consolidation and a clear entry point the way it's flagged below 94 the past two weeks.

This company also received emergency use authorizations for it's COVID-19 serology tests which indicate whether individuals have the COVID-related antibody in their systems. We should see this company be relevant because of this over the next 12 months. For now, I'm just looking for the flag through 94 to work out.

Trigger: $94

Stop: $91.79

Target: $100-102+

Hope to see you in the chat Monday!

Watchlist coming in the following email.


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