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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November 3, 2021
Stocks – AMZN, ROKU, DIS
Macro – SPYtock
- RTM Exclusive: The Trade Desk May Plunge Following Results
- RTM – Pre Fed Thoughts
- RTM – RISK: From On To Off
- RTM: Unusual Patterns In Volality Indexes
- RTM: Third Quarter Earnings Update
- RTM Tactical Update: Markets May Be Losing Confidence In Central Banks’ Ability Control Inflation
- Live Event 10.29.21
Today, stocks were over the moon that the Fed tapered but didn’t talk about a rate tightening cycle. I didn’t even see anything new in this announcement or press conference. It was kind of boring, to be honest.
The Fed futures were undoubtedly not moved by today’s statement. Yields rose across the curve, with the longer-dated yields rising the most, steepening the curve, while the dollar weakened.
My view hasn’t changed as a result of this meeting. I still think we will see the yield curve flatten and the dollar rise, thus tightening financial conditions over time, which will act as a headwind to stocks.
The big thing, though, is the stalling growth that appears to be occurring globally and most notably in China. Iron-ore prices have plunged, and now copper prices are falling too. The Baltic dry index fell by more than 9% today and is below 3,000. Meanwhile, oil prices have stalled and now heading lower as supplies are building. At some point, this should click with the market, that the Fed is tapering into a global growth slowdown.
S&P 500 (SPY)
Currently, the S&P 500 is facing the October 2020 trend line, which broke back at the beginning of September. If the index can get through that resistance which is currently at 4,660, then there is a good chance we move up to the 4,750 to 4,800. If the index cannot get beyond 4,660, then I would think this rally is over, as a failure would signify a retest of the break in the uptrend. It would likely result in the September/October lows being taken out. The RSI on the S&P 500 is now at 73.50, which is high and tells us the market is overbought.
Roku is plunging tonight, nearly 10%, after guiding revenue for the next quarter below expectations. Oh well. A break of $287 will send the shares on their way lower to $228. Probably not a great read-through for another overvalued/overhyped stock, The Trade Desk.
Amazon was up today, and it looks like it will try to refill the gap around $3440. I still think this stock is dead money for the foreseeable future.
Disney will be reporting results soon, and the chart doesn’t look the strongest, with a descending triangle pattern forming and a giant gap to fill at $154.
Have a good one
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