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Stocks Finish Lower As The Bond Market Thinks Twice About The Fed Pivot

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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10/31/22

#STOCKS – $DOCU

#MACRO – $SPY, #RATES, #DOLLAR, #GOLD

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Happy Halloween, I’m going to keep today to the point. It was a pretty boring day, to be honest. The S&P 500 gapped lower and traded sideways, finishing down 75 bps. Today looked like a pause day that typically follows a big up or down day. We have seen these pause or consolidation days on several occasions in 2022, and a continuation of the previous move can sometimes follow these pause days.

Tomorrow is also November 1, which means there will likely be monthly inflows.

The Intraday chart shows what could be a bull flag/pennant that has formed, which would suggest a move higher from here as well. With the potential for the S&P 500 to rise to around 3950.

Rates

Today Fed Fund futures were thinking again about the potential for the Fed to turn all dovish. The April contract saw its rate rise to 4.95% today, almost back to the 5% it was trading at on October 20.

The move higher in the Fed Funds futures also helped to lead the 2-yr higher, and it appears to have broken free of a bull flag pattern. If this works out, I think we should see the 2-Yr trading above 4.6% over the next couple of weeks.

Dollar

The dollar also moved higher today; for now, I think it can move back to around 112.

Gold

A few weeks back, I noted that I thought the gold could fall back to $1,560. After some consolidation, it looks like it is getting closer to that happening, with $1,625 being the support price that needs to break.

DocuSign (DOCU)

DocuSign almost looks like it is forming a bear flag, which could mean the stock falls. It could result in the stock falling back to around $38, a price not seen since January 2019.

That’s all for today.

Mike

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.