loader image

The Merck Pill Bump and Why Extreme Selling Will Continue for Tech

by | Oct 4, 2021 | Stocks

It’s Monday, the second day of October trading, and I have the perfect game plan to get us through the week — it benefits from the news bomb about Merck’s new antiviral pill for COVID-19.

September was not a great month for investors… We saw the S&P 500 trade down 4.76% while the Nasdaq fell over 5%. 

The Russell 2000 sank 3.06% and the beloved Cathie Wood fund, ARK Innovation ETF (NYSEArca: ARKK), tanked almost 10%.  

The VIX, or volatility index, exploded by about 44% — which I expect to go even higher in the fall (it’s up another 12% through Monday afternoon) — and the 10-year Treasury yield went back above the 150 level (or 1.5%). 

The first trading session for October, this past Friday, made up for it…

Merck’s Antiviral Pill for COVID-19 Causes Breakouts in These Names

On Oct. 1, Merck & Co. Inc. (NYSE: MRK) came out with a game changer for the entire global economy, and the stock gapped up accordingly.

The big pharmacy giant saw its shares rise by 9% ahead of the opening bell that morning.

Merck has been developing an antiviral pill, molnupiravir, people can take orally that’ll cut the likelihood of getting hospitalized for COVID-19 by about half.

That’s huge news — and a solid reason why the shares keep rising. 

And it’s already affecting other areas on the stock market.

Looking at the travel stock names, like American Airlines Group Inc. (Nasdaq: AAL) and Marriott International Inc. (Nasdaq: MAR), you’ll notice that it’s already helping cause moves to the upside.

And I expect more breakouts to happen soon.

October is going to be all about playing the reopening names as Merck’s announcement boosts investor sentiment on our recovering economy.

But I also expect some extreme selling in technology to continue throughout this month, and for oil to make new highs. 

Luckily, on Tuesday I’m releasing nine — yes, nine — new trades I put together that should allow us to profit in October, no matter what the stock market conditions become…

Make sure you receive this exclusive trade alert by clicking here.   

Check out the video below to learn more about my October trading game plan and Merck’s new antiviral pill for COVID-19.

Send any trading questions to jeff@joyofthetrade.com and stay ahead of the markets, especially these choppy ones, by subscribing to our YouTube channel

WRITTEN BY<br>Jeff Zananiri

Jeff Zananiri

What to read next

99 Problems and a “Pivot” is One

99 Problems and a “Pivot” is One

A friend of mine sent me this chart about three months ago. I should probably print it and keep it in my wallet next to a photo of my daughter. Given the sheer number of questions I’ve fielded lately, I’ll probably end up showing this chart more than her picture.

read more
Everything Everywhere, Going Down, All At Once

Everything Everywhere, Going Down, All At Once

When our momentum reading went negative last week, I didn’t know that we’d have the second largest bank failure in U.S. history three days later. All I knew was that it went negative… and that we got out of the way.

read more
Trust But Verify…

Trust But Verify…

I want to talk about our version of “Trust but Verify” in the markets. Qualification is the most important part of the investing process. And this F score value strategy looks to be crushing the current market.

read more

Have any questions? Contact Our Customer Service Team