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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STOCKS – $MU, $DASH
MACRO – $SPY, $QQQ, #RATES, #VOLATILITY
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- RTM: VIX Is Still Stuck
- RTM: Post FOMC Rally, No Matter What?
- RTM: Microsoft’s Stock Is Poised To Break Lower
- RTM: Capital One Shares May Plunge
- RTM: The Next Live Q&A Session Will Be Held On 9.23.22 @ 2 PM ET
- RTM: TIPS Driving Price
- RTM: Support For The S&P 500 And Nasdaq May Soon Break
- RTM: Waiting For Opex
- RTM: Stocks Setting Up For Steeper Losses
- RTM: The Canaries Spread Their Wings
What is happening with rates and the dollar is pretty impressive, and the equity market, while down today, has failed to keep up. The Fed meeting tomorrow, I think, will not be a surprise on the rate side, with the Fed hiking 75 bps. The WSJ has written a couple of pieces in the last few of days as if to send a message to the market regarding a 75 bps hike. Again, what I care about the most are the projections. Stocks will likely only focus on the rate hike because that is what they tend to do.
I think the market is set up for a post-FOMC rally no matter what the Fed says tomorrow; I hate to say it. Implied volatility for S&P 500 options is very high, with only the June meeting showing higher Implied Volatility. You can see how quickly it is expected to come down by Monday. That will likely give the market a mechanical bid and push stocks higher.
Could we rally back to 3920? Sure, we were practically there yesterday. But again, I only bring this up so that everyone knows ahead of time should this happen.
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TIP Vs. QQQ
The TIP ETF made a new low today, and the QQQ is still trading about 12 days behind the TIP ETF. The TIP suggests that the QQQ is also getting closer to a new low. So whether the market will rally tomorrow or not, I don’t think it will make much difference.
The 10-yr yield made a new closing high today, climbing to 3.57%. How high the 10-yr goes is a good question and one I haven’t figured out yet. I have been more focused on the short end of the curve. But the break higher today is an important one nonetheless.
Rates aren’t just rising here; they are increasing worldwide. It is a significant fact because this will be a force that will help to drag rates up in the US. The 10-Yr rose by 13 bps in both Britain and Germany today; both were new highs. Despite rates rising in the US quickly, they are rising even faster elsewhere.
Micron finally broke support at $51.80 when it gapped below that level at the open today. I think that sets up that drop to $49.70 and then probably to $46.
DoorDash is getting closer to breaking support; it needs to gap below support to get that next down leg started.
Good luck tomorrow.
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.