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STOCKS – AMD, ARKK, NOW,
\MACRO – SPY, BTC
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Stocks finished the day slightly higher after giving up some decent size gains. The S&P 500 traded as high as 4,325 to come within 1 point of the 200-day moving average; it must have triggered the sell algos that were waiting. The index fell sharply, actually turning negative for a bit. But the index stabilized around 4290 but closed higher by 19 bps at 4305.
In addition to the 200-day moving average, there is a significant downtrend, and the RSI is now over 73. The technicals are very overbought, and at this point, I am just waiting for the 10-day exponential moving average to break, and once it does, I think the sell-off that follows will be pretty fierce.
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Again, I still think we see 3,950 region on the S&P 500, which would now serve as 61.8% retracement.
Tomorrow will be an important day because there will be a VIX options expiration at 9 AM, which should lead to some freer movement in the VIX. Then at 2 PM, the FOMC minutes will be released, which should get a good deal of attention. The FOMC minutes have generally been a sell the new event. It could always be different, but it seems that max dovishness has already been priced into equities, so it’s hard for me to imagine the minutes can read even more dovish. If history repeats, tomorrow can serve as a pivot, not for the Fed, but for stock prices.
There have already been parts of the equity market that appear to have stalled out. ARKK peaked on August 10 and has been unable to participate in this rally. The RSI is very close to breaking its uptrend, which signals the bullish bias is over.
AMD has not participated in this rally and has been stuck around $100 for a few days. So far, the 10-day exponential moving average has supported AMD. I expect that support to break and the shares to turn lower and head back to $85.40.
ServiceNow tried to break out and, to this point, has failed at the top of its trading channel.
Meanwhile, Bitcoin continues to creep closer to the edge as its price and RSI approach their respective uptrends. This could be important because if Bitcoin breaks, it could work to send a risk-off signal in general in the markets.
Anyway, we’ll see what tomorrow brings.
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. 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.