Initial Market Reaction to Geopolitical Events
Last Friday saw a market downturn due to escalating tensions between Israel and Iran. The rapid nature of these events sparked concerns about a potential, albeit short, "third world war." The Wall Street Journal later reported that Iranian sources signaled a lack of desire for further conflict, influencing market sentiment.
Market Rebound and Key Indices
Monday witnessed a significant market rebound. The Nasdaq-100 index began its ascent the previous evening, around 6 PM Middle East time. Both the Nasdaq-100 and S&P 500 indices recovered from Friday's losses, highlighting the market's resilience.
Avoiding "Messy Operations" and Investor Behavior
The quick market reversal serves as a reminder to avoid impulsive trading decisions. Many investors who reacted to the initial news by selling stocks or buying gold likely experienced losses today. The investors who maintained their positions benefited from the rebound, illustrating the potential pitfalls of short-term speculation.
Market Overview and Trading Volume
As of June 16th (Monday), the overall market showed a positive trend, increasing by 0.94%. While a majority of stocks (approximately 65-70%) experienced declines, the trading volume was relatively high, reaching the 30-day average.
Sector Performance
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The energy sector saw a decline due to a drop in crude oil prices, triggered by easing geopolitical tensions.
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The Standard & Poor's 500 and NASDAQ 100 showed upward movement.
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Tech stocks, particularly large-cap and semiconductor stocks, contributed significantly to the NASDAQ 100's 1.42% increase.
Concentration of Gains in NASDAQ 100
A small number of stocks drove the NASDAQ 100's gains. The top 10 companies in the index accounted for half of the 1.42% increase, while the remaining 90 companies contributed the other half. Semiconductor and technology stocks were the primary drivers of this increase. Tesla also experienced gains but lagged behind other tech giants.
Performance of the "Magnificent Seven" and Semiconductor Stocks
Most of the "Magnificent Seven" tech stocks performed well, with increases of over 1% for most, except Microsoft. AMD stood out with a significant surge of 8.81%, likely driven by recent product announcements. Despite this surge, AMD's overall trend remains downward.
Asset Class Performance and Risk Appetite
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Gold prices fell.
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Bitcoin prices rose.
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Stock market prices rose.
This indicates a shift from risk-off to risk-on assets. Stocks with higher betas, like AMD, generally outperformed the market.
ETF Performance
Several ETFs showed noteworthy performance:
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Leveraged ETFs like TQQQ experienced substantial growth.
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Semiconductor ETFs, such as SOXX (and its leveraged counterpart), performed strongly.
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Consumer discretionary ETFs also showed positive performance.
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Medical, health, energy, real estate, and utility ETFs experienced declines.
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Bitcoin-related ETFs also performed well.
Technical Analysis and Market Outlook
The NASDAQ 100 has recovered from Friday's dip, surpassing its previous high. Gold and the VIX (volatility index) experienced declines. The Yen is up. However, some stocks are showing signs of selling pressure, with the Relative Strength Index (RSI) approaching overbought levels and the Moving Average Convergence Divergence (MACD) indicating positive momentum. The speaker advises caution against chasing gains at this point, citing increased risk.
Individual Stock Analysis
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Amazon: Approaching a key technical level (50-day MA crossing the 200-day MA).
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Tesla: Showing little change, still around 330RMB.
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Google: Recovering after testing its 200-day moving average, indicating an uptrend.
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Palantir: Reaching historical highs but exhibiting selling pressure (a "long top line"). The speaker advises caution against chasing the stock at these levels.
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AMD: Broke through its 200-day moving average but encountered resistance at a downward trendline. The speaker notes the stock is still within a downward channel, emphasizing lower highs and lower lows.
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HIMS: Showing a potential "cup and handle" formation, a bullish technical pattern.
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UNH (UnitedHealth Group): Forming a small platform around the 296-297 price level. The speaker suggests watching for a breakout or breakdown from this level.
Concluding Remarks
The speaker summarizes the day's market performance as positive, advising viewers to review previous videos on avoiding losses. He thanks viewers for watching and promises to return with more market insights.
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