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Important Levels To Watch In The Stock Market For October 11
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF NFLX, AAPL, V, AND MA
Before we start let’s remember that earnings season is among us and that means that corporate buybacks are way down, remember the end of June and beginning of July and the end of March and April? Also, end of year selling for Mutual Funds that end their fiscal year ends in October.
Moving on then
The markets are looking to start the day lower on October 11, with the S&P 500 future trading at 2,769, but well off the lows of 2,747.
We can see that yields on the 10y fell to 3.15% overnight, but is holding steady above support. If the 10-year can get below 3.13% then I think we see a quick move back to 3%. That makes the CPI reading important.
The big thing I was watching last night was Asia trading, and the Shanghai fell by over 5% to 2583. But perhaps more important is that the Shanghai composite fell below critical support levels around 2,650 which had held so firmly. The 2,460 level is now the region of strongest support. That is bad news for Alibaba and JD.com
The Hang Seng fell right to support at around 25,260.
The most breathtaking chart out of Hong Kong is this chart on Tencent Holdings (700: HK). This is outright scary.
Germany is not doing better. But if that is one sign of hope, it is that the market their has stabilized and off their lows for the moment.
This is the one bond yield I take the most interest in, which is the German 10-year. Why? Look at that rise in yields since the end of August.
We can see that spreads on the US and German 10 year have blown out to their widest levels in decades.
Apple is clearly the market leader and it makes its price action the key to the marketplace. The level here for support is around $209.
Amazon could be looking for support around $1620 if the 1740 ish area doesn’t hold. The good news is that the 200-day moving average is around that level.
Netflix is right on its moving average. But the level I’m watching for a turn higher is $314. You can see in the chart below.
Micron may be another to watch as a proxy for the chips and risk-on sector of the market. If there is any stock that is a measure of risk, it is Micron. It needs to hold in this $40 to $42 region.
Visa we have ID as a canary, and I’m looking for a turn around $129 to $130.
Mastercard I’m looking for a turn around $193.
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