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#STOCKS – $ZM, $ADM, $HON
#MACRO – $SPY, $EUR, $DXY
- RTM: Amazon’s Stock Faces A Decline – Short-Term
- RTM: Stocks Fall As Dollar Rises
- RTM: Stocks Give Up Big OPEX Gains
- RTM: A Stronger Dollar May Send Stocks Lower
- RTM: Apple’s Stock May See A Sharp Reversal Lower
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S&P 500 (SPY)
The S&P 500 finished the day down by around 40 bps, which was not a massive move by any means. The S&P 500 futures show the index is still within the boundaries of the diamond pattern. If this is the correct pattern, this should be about it, and we should start a meaningful move toward 3,750. If I’m wrong, we need to see the index rise above 4,040 to reduce the odds of just a throw-over fake-out.
The dollar moved higher today and is consolidating at resistance around 107.80. It almost appears to be forming a bull flag, and if so, that suggests the next move higher in the dollar should be coming, with the potential to rise to around 108.72.
The euro also broke down today and fell out of its diamond pattern, and this pattern suggests a move back to parity, if not slightly below. It seems hard to imagine that the S&P 500 doesn’t break lower and follow the path of the euro and the dollar, but again, we have to wait and see what happens.
Zoom is falling by 5% after hours; the company gave weak guidance that missed revenue and earnings estimates. The company sees revenue at $1.10 billion to $1.11 billion, versus an estimated $1.12 billion. Additionally, it sees earnings of $0.75 to $0.78 per share versus estimates of $0.80. The stock is back on a new low watch as the shares trade down below $76.50. That is the critical level tomorrow. If that breaks, the shares are likely heading to $70 and potentially a new low. When this stock makes new lows, the broader indexes tend not to be far behind.
Archer Daniels (ADM)
Archer Daniels rose today, breaking above that downtrend and moving outside the triangle. The RSI is still trending higher, and I look at this stock as a potential indicator of where inflation is heading as something worth thinking about. But more importantly, if there has been a breakout from the pennant, the shares could be heading over $100.
I was doing some work on the DAX and some of its components over the weekend. I realized that the DAX and the DJIA have some similarities, mainly that Siemens has risen dramatically as the euro has strengthened, which made me wonder if the recent move higher in Honeywell is due to the weakness in the dollar. There is a relationship with Honeywell and an inverted dollar that seems to be stronger since August. Something to think about and watch. Honeywell is overbought and is starting to see its RSI diverge, so it may be topping out here.
Have a good one
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.