This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.
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August 19, 2021
STOCKS – F, GM, MU
MACRO – SPY, RSP, IWM
- RTM – A Shift In Risk Sentiment Is Approaching
- RTM- Tapering Is Probably Coming Very Soon
- RTM- Next Live Q&A Session 8.20.21 – 1 PM ET
- RTM- Asian Markets Are On Watch For A Bearish Breakdown
- RTM – Will The Fed Taper At The Wrong Time?
- RTM Video – Is This The End Of The Rally?
- RTM – Leverage Financial Conditions Are Getting Tighter
- RTM Tactical Update – Tapering Is Coming, And It May Lead To Equity Market Turbulence
- RTM – 2Q’21 Investor Letter
S&P 500 (SPY)
Stocks finished the day flat based on the S&P 500’s close of up 13 bps. The index goes into options expiration tomorrow down around 1.4% for the week. The index is closing in on the 50-day moving average and whether it comes into play or not is questionable, but that has happened on several occasions going back to November 2020. For the most part, that could be the biggest and important number to watch on the S&P 500. While it is entirely possible that level never even gets tested, that’s where I would focus my attention.
The index failed three times to overtake the 4,420 level today. To see the index rally tomorrow, the S&P 500 will have to gap over that level at the open; I think; otherwise, it struggles.
S&P 500 EW (RSP)
The RSP index was weaker today, falling by 22 bps, and as I said last week, I wasn’t convinced the equal-weighted S&P 500 broke out. It turned out it was right to wait because the ETF is down nearly 2% this week and has fallen below support at $152.50 and the 2020 uptrend. Additionally, the MACD is now turning lower as well.
The Russell is also broken down, falling below its 200 day-moving average for the first time in forever, and fell below the uptrend we had been watching closely. Look, it could easily snap higher tomorrow, but if it doesn’t, the RSI is likely to make a fresh low, and that is the last thing you want to see if you are hoping for a bottom.
Ford keeps dropping and is now trading below support at $12.75. The next big support area comes at $12.15; that is where a gap is just waiting to be filled.
GM has the same struggles as Ford, and it seems that the next place for the stock to stop if support at $49 breaks could be around $45.25.
Micron’s floodgates are getting close to opening all over again, with a break of support at $70. There would be a huge drop ahead for its shares, probably back to $58.
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