Zoom Stock – An Imminent Milestone For The S&P 500 (And A Warning For Zoom Video Owners)
Monday started with a modest wave of selling as the digested weekend headlines of a major institutional investor blowing up and unfilled margin calls leaving several banks with massive write-downs.
Experienced traders are taking note because similar episodes triggered a cascade of falling dominos sent the indexes into a bear market. But so far, this story seems contained and hasn’t spread beyond a few directly affected stocks.
At least for the moment, the market is treating this as an isolated incident and Monday morning’s dip was shallow and fleeting.
The afternoon rebound reversed all of the early selling and left us a small fraction shy of all-time highs. As much as the cynics rant about complacency, vulnerable markets don’t keep making higher-highs. The thing the critics forget is just how long complacency lasts before the fall.
At this point, we are only a handful of points from the psychologically significant 4k level. It’s taken us a couple of months to go from 3,900 to challenging 4k, but it looks like the breakout is finally coming. After two months of resting and consolidating, the market is ready to go.
I’ve been ragging on Zoom Video (NASDAQ:) for months and unfortunately, the situation isn’t getting better. After a brief bounce above $400 support last month, the stock retreated back to recent lows and is poised to start making fresh lower-lows. This remains a short under $400 and for anyone still holding ZM, it is about to get worse.
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