The selling seen off the open yesterday didn’t last long as S&P futures started grinding higher after the close. From there, buying hasn’t stopped and stocks look to open the month right at all-time highs.
The momentum higher looks to take us above the all-time high print of 3668 in the S&P futures. This was the spike seen after the vaccine news early in November. The question for the bulls is if there is “fresh powder” all the way to 3700, or will profit takers step in.
Potential news might have some influence as ISM manufacturing will come in later this morning. Additionally, Fed Chair Powell and Treasury Secretary Mnuchin will be in front of congress today in a hearing on COVID-19. Investors should watch for comments on the need for stimulus, as both men can influence some movement on a COVID relief package.
S&P Futures Trading Levels
The S&P futures currently sit at 3360, just eight handles below the all-time high print.
Support levels for the day will be 3650 and 3626.
Upside resistance is 3685 and 3706.
The current S&P trading environment is breaking out higher. The 21-day MA for the S&P 500 is at 3535 and the 50-day is 3450. While we are extended far beyond the MA’s, Fibonacci targets above will likely draw the market into the 3730-50 range.
Three Stocks to Watch
TSLA- Tesla sold off yesterday as there were worries that the S&P addition would be done in two tranches. However, an announcement last night confirmed the liquidity would be acceptable and it can all be done on December 21st. Tesla will be the seventh biggest S&P company after the additon, so traders are trying to get ahead of all that buying that has to happen. The stock is up almost 5% premarket.
ZM- Zoom Video reported a big beat of $0.99 v the $0.75 expected. The company guided Q4 higher and raise FY21. It was no surprise that the company would perform this quarter, but there are worries in what kind of growth the company will see when economies open up. The stock is trading down over 6% premarket.
GBTC/Bitcoin– Bitcoin is trying to break all time highs and is trading just under $20,000 in the futures contract. It has been quite the run for bitcoin, which is up over 100% since September. The Grayscale Bitcoin Trust (GBTC) is one way to get exposure without having to directly buy bitcoin. Investors in GBTC have been rewarded this year, seeing gains of about 130%.
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