Futures did not look good this morning, and the market looked like it was ready to have another blood bath of a day, but if you remember what I talked about in yesterday's post, if SPY opened below 300 but above 297, that would be a good sign and that if it maintained that 297 support level then it could try and move past 300 and beyond. Needless to say, it bounced through 300 really nicely and SPY is now trading at 310.
The next level of support for SPY is at 304 now and the market technicals and indications are still very bullish. Of course, all of that can change based off of the news, and we have two big pieces of news coming up tomorrow.
The retail sales report comes out tomorrow, and this will give us a good indication on how the reopening of America is going for the retail stores. It's expected to pretty good, and based off of all of the news we have had in the past, it will likely beat expectations giving a nice pump to the retail stocks tomorrow, so I will be watching some of those tomorrow.
Powell will also be speaking tomorrow morning, outlining more of the plan for the economy.
The FED actually released some info today, outlining that they would begin buying corporate bonds ($LQD and $HYG) and this bumped the market in the last couple hours of trading. This is important because if you're a business who is hurting for cash and you have debt and it's unlikely that you can pay it back, the government is willing to buy that debt basically. This is very good for the economy and the businesses, as the government is taking on all of the risk. Sure, this might be a long term problem, but the young generation (me) will worry about that in the next few decades to come.
I'm going to be watching some retail stocks tomorrow to see a nice bump from the sales report. Those stocks include $COST, $WMT, $HD, $LOW. You can also make the assumption that if the retail sales are good, then the rest of the "opening of the economy" stocks will do well, and it might be the time to get back into the restaurant stocks: $BLMN, $DRI, $EAT, $DIN, $QSR. I'm going to watch these stocks and look for laggers and leaders there. Only a few of the stocks moved well today in anticipation of tomorrow, but there can be opportunity here, especially since most have stayed pretty far down. Also watch $CAKE, $PLAY, as those were the popular stocks that moved well before. I actually really like $CAKE here, they've pulled back a good amount and are starting to move back upwards. I'll be looking for cheap options there in the morning.
I'm also watching for continuations in the work from home/stay at home stocks. Most moved nicely today and I've seen them move like this in the past and they usually have another two days of continuations, but we'll see. Those stocks: $CLDR, $ZS, $ZM, $DDOG, $CRWD, and a few others. This is basically what Cramer outlined last Friday as the Cramer COVID index, and all of those stocks were up today.
I've noticed that the first hour of trading gives an indication on investor sentiment. Recently, stocks will open low and move up quickly, and other days it will open high and drop quickly. Futures are up right now, and that could very well be the case for tomorrow, but if there is a dip, I'm thinking that the market will continue bullish so that could be a great time to load up on some long options or your long term positions.