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September 14 was dull, with the S&P 500 trading between 3,910 and 3950. However, it has given the index an appearance of a consolidation day, and while it doesn’t have to, the day after the consolidation is typically when the follow-through comes. So if there is going to be another leg down to come, tomorrow may very well be the day that provides that move lower.
It has happened on a few occasions just since April as marked in the chart below, with the market both rising and falling.
The index is also very close to breaking that big ascending broadening wedge. Today, the S&P 500 was close to breaking the lower uptrend, around 3,920, and did briefly. Ideally, if you are a bear, you want to see the index gap lower tomorrow, below that trend line, and below 3,920.
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Micron has been very weak, and it may get even weaker. The shares are close to support around $52, and should that level of support break, the door to $49 opens, and potentially $46. The problem for Micron is that the relative strength index is even weaker, has been a clear long-term downtrend, and recently broke a short-term uptrend. Based on that, I think that Micron’s momentum is bearish and pointing lower. Earnings will be on September 29, so keep an eye on this one.
Meta broke critical support yesterday when it fell below $155. The stock didn’t bounce back today either, which is a weakness. The stock doesn’t have support until it returns to pandemic lows at $139. Yes, that is how far Meta has fallen.
I don’t usually talk much about gold, but sometimes I do, especially when it is at an inflection point like it is right now. It is very close to breaking support at $1,680; if that happens, there is nothing to support it until $1,565, which is about 8% lower. The momentum is negative, as noted by the falling RSI. Gold could also tell us something about the direction of the dollar and rates. A soaring dollar and rising rates are not good for gold, which is why the metal has acted so terribly. A breakdown in gold could tell us that rates and the dollar have much further to rise.
Charts used with the permission of Bloomberg Finance LP. 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.