Last week’s cliffhanger close made it reasonable to suspect that things could get worse before they got better. Over the weekend, news broke of the carry trade unwind and escalations in the Middle East stoked market fears, resulting in Monday’s massive gap down and the VIX hitting levels not seen since the COVID crash. However, a powerful rally ensued throughout the week, and the indexes all managed to regain most of their losses from Monday’s open. In other news;
- The carry trade explained
- Buffett unloads AAPL
- Mortgage rates drop to 15-month low
- SMCI announces 10:1 stock split
- Jobless claims at 233k vs. 240k est.
Now for the big question at hand; Was that the bottom, or was this week’s action merely the tremors before a larger move to come? Let’s see what the charts have to say.
Weekly Analysis
SPY (SPDR S&P 500)
Dip buyers were out in full force on the SPY ETF this week, which saw Monday’s rout get completely gobbled up by the end of day Friday and the index closing almost exactly where it closed last week, at $532.99 (+0.02%). A sharp spike in the quarterly lows list with the price within earshot of the 200-day SMA was once again enticing enough to motivate buyers to step in.
QQQ (Invesco QQQ Trust)
Despite starting the week more than 15% below its all-time high, the QQQ ETF managed an about-face, recouping all its losses to close the week higher, at $450.53 (+0.40%). The chart makes one thing clear; When 25% of names hit new quarterly lows and the price tests the 200-day SMA simultaneously, it’s time to buy.
IWM (iShares Russell 2000)
This week, the IWM ETF managed to give back the remainder its gains from previous weeks, returning once again to the all-important 200-day SMA where it dug in and found support. Though the bounce was a bit muted compared to its peers, it did manage to regain most of what it lost on Monday to close the week at $206.46 (-1.18%). Notably, this is the second spike in quarterly lows to occur above the 200, suggesting that this index is indeed strengthening under the hood.
Earnings
Notable Results
LLY (Eli Lily)
- EPS: $3.92 vs $2.70 est
- SALES: $11.30B vs $9.50B est
DDOG (Datadog)
- EPS: $0.43 vs $0.37 est
- SALES: $645.00M vs $624.88M est
OXY (Occidental Petroleum)
- EPS: $1.03 vs $0.77 est
- SALES: $6.82B vs $6.80B est
DUOL (Duolingo)
- EPS: $0.51 vs $0.32 est
- SALES: $178.30M vs $177.09M est
HOOD (Robinhood)
- EPS: $0.21 vs $0.15 est
- SALES: $682.00M vs $643.34M est
CVS (CVS Health)
- EPS: $1.83 vs $1.73 est
- SALES: $91.23B vs $91.51B est
SHOP (Shopify)
- EPS: $0.13 vs $0.12 est
- SALES: $2.00B vs $2.01B est
DIS (Walt Disney)
- EPS: $1.39 vs $1.20 est
- SALES: $23.20B vs $23.11B est
SMCI (Super Micro Computer)
- EPS: $6.25 vs $8.10 est
- SALES: $5.31B vs $5.31B est
AMGN (Amgen)
- EPS: $4.97 vs $5.01 est
- SALES: $8.39B vs $8.33B est
RIVN (Rivian)
- EPS: $(1.46) vs $(1.21) est
- SALES: $1.16B vs $1.13B est
ABNB (Airbnb)
- EPS: $0.86 vs $0.91 est
- SALES: $2.75B vs $2.74B est
DUK (Duke Energy)
- EPS: $1.18 vs $1.02 est
- SALES: $7.17B vs $6.61B est
CAT (Caterpillar)
- EPS: $5.99 vs $5.54 est
- SALES: $16.70B vs $16.68B est
UBER (Uber)
- EPS: $0.47 vs $0.31 est
- SALES: $10.70B vs $10.57B est
PLTR (Palantir)
- EPS: $0.09 vs $0.08 est
- SALES: $678.1M vs $653.2M est
CSX (CSX Corporation)
- EPS: $0.49 vs $0.48 est
- SALES: $3.70B vs $3.70B est
What’s Happening Now
SOXX (iShares Semiconductor ETF)
Return of the king. This week, a clear pattern emerges in sector ETFs when plotting 30-day Calendar Change % against Week-to-Date Change %. The better the 30-day return, the worse this week’s performance—could this be a case of reverse rotation? Semiconductors are bouncing back strong after a nearly 19% drawdown, while real estate and utilities get left in the dust.
DIS (Disney)
Despite a Q3 earnings beat, long-term Disney shareholders have been straight up not having a good time. More than four years later, DIS is still just 9% above its 2020 lows and over 56% off its all-time highs. Wall Street remains bullish, but barely; with most buy ratings remaining intact, price targets are being slashed across the board as the stock struggles to find its footing.
AAPL (Apple)
Apple kicked off a monster rally this week, rebounding 10.3% after a flash crash down 10.8% that retested previous all-time highs. The momentum might not stop here—long-term seasonality shows that Apple’s single strongest time of the year is next week, with positive returns 86% of the time and an average five-day gain of 2.48% over the past 15 years. An apple a day keeps the bears away.
Believe it or not, this is just a fraction of what happened in the markets this week. For a full run down delivered straight to your inbox every weekend, sign up for The Official Trendspider Newsletter.
Market Update Into October 12th: Semi Stocks Slide