Apple faded 3.5% after the iPhone maker warned the impact of supply chain disruptions will be worse than anticipated, with total impact of $6 billion in sales (Q3). Despite this, Apple added approximately $30B in revenue, and are set to double their 2019 revenue next year ($70B to $140B), clipping 70-80% gross margin. Hat tip to Sean in the trading room for the stat.
Amazon.com Inc dropped nearly 5.0% after the company forecasted downbeat Q4 holiday period sales, as the company projects higher costs to entice new seasonal workers, along with operational disruptions.
TEAM stock jumped on strong results. DXCM stock was little changed after Dexcom earnings and sales topped analysts estimates. U.S. Steel (X) was a notable winner, signaling an early entry, after handily beating estimates.
TEAM stock is on IBD Long-Term Leaders.
SPY Daily Chart – Keeping it Simple
The SPY daily chart references the S&P500 support at 4500 and the call wall resistance at 4600. Once again, as long as SPY/SPX stays above 450/4500 we remain in a positive gamma state. Below that level we’d be bearish. That doesn’t mean we don’t see a possibility of a fade or consolidation at highs, it means we would position differently should we lose this important gamma level.
Resistance is the call wall at 4600/460, where the majority of options have repositioned.
The SPY daily chart also shows a bullish RSI (above 50) and MACD above its signal line.
S&P500 and SPY Support / Resistance
Here are two numbers to remember, 4500, 4600 for the SPX, and 450, 460 for the SPY.
- Until the indices drop below 4500/450, we are in a positive gamma state. We’d be bearish below.
- SPX 4600, SPY 460 is call wall resistance. Until we see the call wall shift higher, we’ll stay in this range.
- If you are worried about weakness in the short term, hedge at highs.
- UPDATE – call wall shifted higher overnight 4600 > 4650
Futures are moving off the pre-market lows.
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Happy Trading,
Vinny
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