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October 6, 2021
Stocks – WMT, ADBE, INTC
Macro – SPY, VIX
- RTM: Consolidation Ahead Of Next Leg Lower
- RTM- Watching Your Tail
- RTM Exclusive: Intel’s Stock Is Far From Cheap And May Head Lower
- RTM – The Selling May Continue For Some Time Longer
- Merck’s Call Buyers Return
- Tactical Update: Fundamental Shifts May Send The Stock Market Even Lower
- RTM- Earnings Revisions Are Beginning To Turn Negative
- Micron May Head Lower Amid Falling Memory Prices
- Stocks Reach An Inflection Point
Stocks finished the day higher by 40 basis points, after starting the day sharply lower. So this is getting to be somewhat tiring, with the index just bouncing around. It is creating a giant consolidation pattern here in the US markets.
VIX goes up; the market goes down; VIX goes down; the market goes up. It tells us there is no confidence in this market, and the options market is firmly in control, just bouncing the S&P back and forth between support and resistance.
I don’t think much of this decline has to do with the debt limit. First off, I couldn’t imagine the debt ceiling not being lifted. Second, the dollar index has been rising. If people are worried about the debt limit, why is the dollar going up? Shouldn’t it be falling? Plus, bond yields have hardly even moved. So let’s forget about this debt limit thing; if the market rallied today because of the debt limit potentially being extended, then it is likely to sell right back off tomorrow. The recent decline has nothing to do with the debt limit, although it makes for great headlines.
Anyway, the pattern today looks very much like the pattern on October 1. So does it mean we get a repeat of the past couple of days and head lower again tomorrow? It certainly could. There is a gap that needs to be filled at 4,435.
Walmart has been holding on to support around $135, and while the stock has likely bottomed yet, it probably is due for a short-term bounce higher back to $142.
Intel looks very weak, and the stock is likely to head lower in the future. Earnings growth for this company will be hard to come by over the next year, and that means even at 12 times forward earnings, the stock isn’t cheap. It probably could see a PE that falls to around ten over time. I would not be surprised to see it break the uptrend and fall to $47. (premium content – RTM Exclusive: Intel’s Stock Is Far From Cheap And May Head Lower)
Adobe is another stock that is oversold currently, with an RSI below 30. Like Walmart, it probably hasn’t bottomed yet, but it is due to rebound and fill the gap back to $604.
I guess we will see what tomorrow brings again. At this point, it is anyone’s guess.
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