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.
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September 30, 2021
Stocks – AMZN, AAPL, DIS, FDX
Macro – SPY, QQQ, VIX
- Stocks Reach An Inflection Point
- RTM – The Global Growth Killer Just Broke Out
- RTM Video: The Market May Not See A Fourth Quarter Rally
- RTM: The Market Is The Middle Of Preparing For A More Hawkish Fed
- RTM – Value May Now Outperform Growth
- RTM Tactical Update: Nike And FedEx Fire The First Warning Shots
Michael Kramer and the clients of Mott Capital own AAPL.
S&P 500 (SPY)
It’s a pretty bad day for stocks, with the S&P 500 falling by about 1.2% to finish the month down 4.7%. The market doesn’t look all that healthy, but then again, it hasn’t looked healthy for weeks, maybe months. It seems like at this point; we are in the middle of wave three down. We will need to confirm this by falling below 4,300 tomorrow. If so, I see a move to 4,240 at a minimum and could be as steep as 4,115.
But here’s the problem, at 4,115, if that does come into play, the S&P 500 would be trading for a stunning 19.3 times its next-twelve-months earnings estimates. A still very pricey multiple. If I had my way, I would like to see the index settle at and trade for something like 17 times NTM estimates, or 3,600. I think 17 is a good PE for the market, given where growth rates are going and the low rate world. We have to hope that earnings estimates hold up and don’t start coming down.
Despite today’s drop, the VIX hardly increased, rising just 2.5% to 23.1. Indeed, not a sign of any fear being built into the market yet. It could be an indication that serious selling hasn’t even begun. If you start to get a VIX that can go up in an orderly manner instead of those significant 20% one-day jumps, you could see a market that moves much lower over time.
Meanwhile, the Qs have been consolidating and forming a bear flag, which was present in the S&P 500 futures this morning before it broke. The pattern would suggest the Qs fall back to $346.
The chart for Apple looks pretty weak, and it should break support at $141 and start its drop to the low $130s.
Amazon looks pretty bad too, with a break of support at $3,300 and a negative sloping RSI, the stock’s next stop will probably be $3200.
Disney is very close to falling below support at $168, and with a giant gap to fill at $154, it is not looking good.
The disaster, also known as FedEx, keeps on dropping with no end in sight. It could still have a considerable distance to fall, too, with $180 the most suitable spot.
Ok, that’s all. I will have a new video coming out tomorrow.
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.