11/21/22

#STOCKS – $ZM, $ADM, $HON

#MACRO – $SPY, $EUR, $DXY

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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.

Dollar (DXY)

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.

Euro

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 (ZM)

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.

Honeywell (HON)

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

Mike

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