China China China

Here’s what happening in the US stock market today:

1. Today, iShares China Big Cap (FXI) is down more than 5%, to the lowest level since May 2020. It’s pulling down Emerging market EEM with it.
2. Bears are hammering the US market down (SPY down 0.95%) and blaming China for it. But really is it China or CDC that’s causing the meltdown in stocks. CDC expected to announce mask mandate for indoor settings. 
3. The Chinese Govt is hellbent on destroying their companies and it’s making lots of people nervous in the US for no good reason. It’s hard to tackle the fear of the unknown.
4. First, it was Alibaba, then they attacked Didi, and then they went after tutoring stocks, tomorrow it could be who knows? No wonder, even good-quality stocks like Nio is being hammered. It’s down 10%. XPEV another Chinese EV play is down 14%.
5. How low Chinese stocks can go? Alibaba used to trade at $300 in Nov 2020. Then the conflict started and today BABA is trading at $182. You never know, so never catch a falling knife. Stay away from Chinese stocks.
6. In a bad market environment, nothing gets spared. Activision Blizzard, the maker and publisher of video games. cracks below 200 dma. The stock looked promising at 200 dma and I discussed it too last week but this is a different market. There are reports that some employees have gone on strike on allegations of hostile work environment.
7. The only trade that’s working – Not taking a trade.
8. Will Nokia survive this meltdown? I am bullish on the stock as long as it can hold 4.5. Nokia is going to be a big beneficiary of 5G rollout, new geopolitical environment, and aggressive cost-cutting.
9. Why everyone is excited about Boston Scientific BSX? The stock has broken out to a new high. The company came out with strong set of earnings and raised its full year earnings outlook to $1.6/share. I will not be surprised if the stock does well over the next few months.
10. Speaking of Breakout, Hasbro stock should do well. It’s a great stock to add today on declines below 102
11. Are people worried about the Delta variant? According to the recent TSA data, nearly 2 two million people are transiting through U.S. airports daily. This is three times more than the traffic witnessed around the same time last year. But the media is back with Fear porn.
12. Workday WDAY stock is down 6% today on news that Amazon has dropped a 3 year plan to utilize Workday for its HR needs.
13. CVS is doing well to hold $80 levels.
14. Covid diagnostics stock CODX is on move with $9 as solid support. As covid cases surge, Quidel QDEL stock should do well? Will momentum trade work?
15. We are not Bargain Hunters. We are trend Hunters. It’s tough to play the game when there is no clear trend in play.

Chart Source: finviz.com

Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purposes. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers.