The Shakedown 5/31/20

LAST WEEK, S&P 500 (+3.06%):

Tuesday: +1.23%

Wednesday: +1.49%

Thursday: -0.18%

Friday: +0.50%

Very sad weekend for America as riots and looting broke out nationwide over protests concerning the murder of George Floyd at the hands of the police. Tough to worry about the S&P gaining or dropping a few points when the country is burning to the ground, but alas, we press on... 

The market closed the week very strong once again as the hyper-uptrend following our March 18th lows continues. Over the past couple weeks we have seen some money rotate from the growth stocks that have mostly led this rally to cyclical stocks such as industrials, financials, materials, transportation & utilities.

Could this be the market pricing in a quicker-than-expected pandemic recovery with states reopening and signs of a "Coronavirus second wave" looking futile thus far? That would be the common consensus right now.

For the first time in two weeks, we'll (most likely) be walking into a Monday morning gap down as futures are down ~1% amidst the riots nationwide. We will likely be opening around the first support area so we will get to see the market's commitment to last week's continued buying.

$300 is the first support area in the SPY, but with civil unrest likely to continue, do we see a downside move after we went +6% in two weeks? 

Earnings Season Winding Down

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

PGNY Long

Progyny PGNY is a company that specializes in fertility treatment for families that have trouble getting pregnant. Love this company for the long term. This PGNY is setting up beautifully on the daily chart for a few reasons. 

First, their gap up on earnings was caused by a jump in revenue by 72% in the first quarter of 2020 despite disruptions to fertility medical services as a result of the pandemic.

Secondly, in that gap, they successfully turned their previous resistance area into new support.

Thirdly, they have been cementing that support all last week as buyers continuously defended the support level. If buyers can overtake the 25.25 first resistance area, it could be ready for a move higher. This is a thin name so we don't want this one triggering too early off the open, unless we see cataclysmic volume, then it's game on.

Trigger: $25.25

Stop: $23.35

Target: $32-36+

Hope to see you in the chat Monday!

Watchlist coming in the following email.