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 to get the Weekly Monster Market Commentary and join the 3,342 subscribers getting it for FREE!
#STOCKS – $INTU, $AMD, $QCOM
#MACRO – $SPY, #RATES, #GOLD $GLD
- RTM: Hawkish As Expected
- RTM- Pre FOMC
- RTM: The Hawkish Surprise May Come Tomorrow
- RTM: Inflation Could Be A Persistent Problem
- RTM: Amazon [Portfolio Update]
- RTM: Shopify’s Shares May Surge Much Higher
- RTM: Stocks Could Run Higher On A Flood Of Liquidity
Stocks dropped today after the Fed failed to deliver the dovish pivot the market was waiting on. Not only did the Fed not deliver on the dovish pivot, but it was also made clear that rates would have to go higher than previously thought, and that the runway for a soft landing was narrower.
So in classic form, the S&P 500 dropped like a stone, closing around 3,750. That is the dividing line for tomorrow. If the 3,750 level breaks, the index could fall back to 3,640 and potentially back to the gap of around 3,580. The only thing lifting the market was hope and systematic flows; both have vanished.
The key to what happens from here will return to the dollar and yields. Equities will be pressured lower if the dollar keeps strengthening and yields keep increasing. Equities will likely begin making new lows if the dollar and yields start making new highs.
The 2-yr is now back to 4.6%, and as I have been saying, I think it is going higher and potentially as high as 5%. That is where the Fed fund futures are seeing the overnight rate around by May 2023. If the overnight rate is going to 5%, then the 2-year should rise to about 5%, and a bull flag projection suggests 4.92%.
I think the QQQ is already broken after falling through support today at $269. It is probably on its way to filling the gap at $260.
AMD ended up finishing the day lower by almost 2%, despite rising by nearly 5% at the start of the day. The question is whether there is more follow-through. If the shares can break support at $58.50, then a retest of the lows at $55.50 seems possible, which opens the door to the shares potentially falling back to $49.
Given that horrible revenue guidance, I thought Qualcomm would be down much more after hours. The opportunity for the stock to fill that gap at $92 just got closer, given the terrible outlook. The falling RSI would suggest that the stock makes its way down to that gap.
Intuit appears to be forming a Head And Shoulders pattern, with the neckline around $385. The news from Intuit regarding its Credit Karma unit started this recent move down, and even the earnings pre-announcement didn’t help today. The shares struggled to rally even before the FOMC. A break of $385 could lead to a further decline to around $325.
Finally, gold looks like it is getting ready to break lower, and with the dollar and rates ripping, I do not see how gold doesn’t fall. Support for gold comes at approximately $1,565.
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. Past performance of an index is not an indication or guarantee of future results. It is not possible to invest directly in an index. Exposure to an asset class represented by an index may be available through investable instruments based on that index. 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.