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.
Otherwise, enjoy the column!
Subscribe to the Monster Stock Market Commentary and join the 2,562 subscribers getting it for FREE every day!
August 17, 2021
STOCKS – FCX, TSM, BA, F
MACRO – SPY, DXY, HG
- 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
Stocks moved lower on August 17, with the S&P dropping by 0.7% and the Qs falling by around 0.9%. The declines followed a weak Asian trading session and disappointing US Retail Sales. Jay Powell did do a live Q&A session today, but it failed to garner worthwhile market-moving news. Instead, it will leave the market waiting until Powell speaks again at the Jackson Hole Symposium, which will take place on August 26 through 28. It will also leave the market to try and read the tea leaves of the Fed minutes to understand what the Fed’s next move may be when that is released tomorrow afternoon.
The dollar index may be about to break out from its current consolidation as it again approaches resistance at 93.20. The index has struggled there for some time. Still, it has momentum in its favor. This time, it approaches resistance, not in an overbought or overextended position as it did the last time, with the RSI and MACD both trending higher and indicating a breakout is likely to occur.
Perhaps talk of tapering in the Fed minutes will help push the dollar higher, and a stronger dollar will help the Fed immensely. A stronger dollar will help to pressure commodity prices lower and contain inflation. In fact, at this point, a stronger dollar may be the Fed’s best weapon against inflation. The big risk, of course, is a strong dollar does potentially weigh heavily on global growth.
S&P 500 (SPY)
The S&P 500 managed to fall right to support today at 4,418 and was able to find a bounce off of that level. But more important is that the advance/decline line has really started to show signs of deterioration and has been down 4 days in a row and back to levels not seen since the middle of July.
It is also worth noting that copper had a big breakdown today, falling below a key uptrend that started in March 2020. The breaking of this trend line will need confirmation tomorrow, but if the metal continues to weaken, it looks like it could be a huge blow to the global growth narrative. This is likely to grow worse if the dollar continues to strengthen.
Meanwhile, stocks like Freeport fell sharply today due to weaker copper prices. It has been trending lower in recent weeks and has bearish momentum indicators. The next big support level doesn’t come until $34.60
Ford got checked off today as successful, falling to my lower target and hitting $12.75. Anyway. (May still be free to read – Ford’s Surging Stock May Fall Following Second Quarter Results).
I’m watching Boeing here as it has been consolidating for some time and is now quickly approaching support at the 2020 uptrend around $210. That trend line is critical, especially with a gap that needs to be filled at $155.
Taiwan Semi (TSM)
Taiwan Semi is probably an essential stock to watch now, as it is nearing a potential break lower with support at $109 drawing closer. I can’t help but think that if one of the biggest semi companies in the world breaks down, it will be a very bad omen for what is to come from the rest of the market.
Have a great night
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.