Posted December 01, 2020
By Scott Stewart
📛 TSLA ALERT
Welcome to the Rude Awakening for Tuesday, December 1st.
Looking at the markets here this morning, and we are up strong once again.
The Nasdaq is powering up by about 134 points, pushing up on the techs.
We had a rotation out of the techs for a while, and we're now moving back into those areas.
We see the Nasdaq pushing up to a high, high level here.
SPX, again, strong on the day, up 47 points at the open here.
Looking to rebound to these all-time highs once again folks, as money continues to pour in.
Buys Across the Board
We're seeing buy activity pretty much all across the board right now.
Some of the things that we're watching in the news right now
Nikola Corp. (NKLA) just absolutely tanking. Again folks, just not that long ago this was almost $100 a share, pushing up to the $95 level, down to $17 now.
I don't want to call them frauds but I think they're frauds.
They don't produce any product they don't even have a working prototype!
All kinds of allegations against them, from Hindenburg, which is a short-selling firm, that these guys are basically just pulling one over on Wall Street. General Motors was their salvation (or going to be their salvation) with a partnership equity deal that fell apart on them. And it's basically just a supplier agreement now
And so, I would continue to expect to see weakness in NKLA.
Weakness in Stay at Home Stocks VS. Strength in One Stock
Were also watching Zoom (ZM) today.
Zoom reported earnings yesterday after the bell. Excellent earnings, but not up to snuff, compared to what the market was expecting or hoping for.
And this right here may be the canary in the coal mine with these stay-at-home stocks.
You've got amazing growth here still taking place in Zoom, but it's just not what the market is expecting or hoping for. It's starting to dissipate. And we're starting to see that dissipation take place in all of these stay-at-home type stocks, where this exponential growth is now starting to taper off. So, we're seeing maybe a rotation out of these kinds of stocks.
Now, the converse of that, Tesla (TSLA). That is absolutely just screaming up to the upside as it is getting ready to be added to the S&P 500.
The question was, how would the S&P add this to their index? And the answer came out yesterday they're going to add it in one fell swoop.
That's going to be a big, big multi, multi, multi-billion dollar purchase for a lot of index funds. It's pushing Tesla higher here as it gets ready to be added to that index. And all of these index funds are going to need to be buying it, whether they own it right now or not.
Also today folks, looking and preparing for Salesforce (CRM).
Salesforce is going to report their earnings today, after the market close.
About a 7.2% implied volatility in CRM right now. It's average move over the last four quarters, about 8.5%. So, keep that on your watch list as well.
A lot of activity happening today in the marketplace, folks.
We'll be back tomorrow with another additional update.
Scott StewartEditor, Rude Awakening