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For the week of September 30 – Stock mentions SPY, XBI, SMH, AMD, AMZN, FB, MU
Stocks fell on Friday with the S&P 500 dropping by 50 bps on the news Trump was now thinking about limiting the ability of Chinese companies to list their equities on the US markets. It likely won’t happen, in my opinion. This is just a typical pattern of increasing the hawkish rhetoric ahead of a trade meeting. It serves as a reminder to China that there are plenty of other ways for the US to mess with them other than tariffs.
S&P 500 (SPY)
The good news is that the S&P 500 continues to find support where it is supposed too. On Friday that level was around 2,950. However, the bad news is that resistance continues to plague the index at 2985. It is becoming pretty clear to me at this point that a descending broadening wedge or falling megaphone pattern is forming in the index. Based on what I can tell, this appears to be a bullish pattern.
We have seen similar patterns in the charts form in the past, and at least the two other times have resulted in a move higher.
Biotech (XBI)
The biotech group continues to get slammed. It seems the XBI is looking to refill that gap from January.
Semiconductor (SMH)
The semiconductor SMH ETF doesn’t look very bullish at the momentum, with a potential triple top that has formed. We need to monitor this ETF very closely.
But if you want to see something even worse, check out the SMH relative to the SPY. Pretty amazing, right? It is almost as if there are algo’s out there saying sell the SMH when it reaches 41% of the value of the SPY.
STOCKS
Micron (MU)
Micron fell hard on Friday as it should following underwhelming gross margins. The stock broke a bunch of support levels, but the bigger one was at $44.10, and now that means $42 is likely in play
Amazon (AMZN)
Amazon is also looking weak, and $1700 is the last line in the sand before a steeper decline to $1620 takes hold. The declining RSI would suggest to me that the stock is heading lower from current levels.
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[youtube-feed feed=7]Facebook (FB)
Facebook is breaking down, and any hope of the stock rising seems to be lost at this point with $173 on the horizon.
AMD (AMD)
AMD continues its slow grind lower, and the RSI also suggests that the stock continues to move lower as well.
That is all for today.
-Mike
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Charts used with the permission of Bloomberg Finance L.P. This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.