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 – KBH, TSM, TSLA
MACRO – SPY, IEF, LQD
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- RTM: Stocks Rally In Front Of Powell, Again
- RTM: Stocks May Be Ready To Make New 2022 Lows
- RTM: Data Strengthens The Case For Lower Prices On Stock
- RTM: Stocks May Be Heading For New Lows
- RTM: TIPS And Financial Conditions On The Move
- RTM: S&P 500 — 3,950
- RTM: POWELL STRIKES BACK
- RTM: Bear Market Rally?
- RTM: The 2-Yr Treasury May Approach 4%
Stocks finished the day higher in a repeat of the Jackson Hole episode. Stocks rallied sharply on August 25, the day before Powell. Stocks rallied sharply today, a day before Powell. The market was pretty intense right from the start and seemed to find something in Fed Vice Chair Brainard’s speech today to latch on to, like “the risks will become more two-sided at some point.” Gee, very revealing.
So let’s call this a short-covering rally or, better yet, a positioning event. Because the risk isn’t that Powell is Hawkish, the risk is that he is dovish. And that is the mentality of how the market thinks. Could the index rally say 4,020ish, then turn lower and fill the gap at 3,840? Sure, that seems possible.
Is Powell like to be dovish tomorrow? Probably not.
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Powell can’t afford to be dovish. In one day, the IEF/LQD ratio wiped out three days of gains, which is another way of saying that it took three days for financial conditions to tighten and one day to ease back to where they had started.
Taiwan Semi (TSM)
Taiwan Semi has always been an outstanding stock to watch because it tends to be a good leading indicator. There is support at $78 for TSM, and if that goes, the next level to watch is the gap at $75.50 and the July lows.
KB Home (KBH)
The KB Home chart looks similar to that of Taiwan Semi.
Tesla was up today, calling into question my breaking of the neckline on the Head And Shoulders. The answer is that I don’t have one yet. I could have drawn the neckline too low, which doesn’t change the fact that there is a gap to fill at $247. So, it is probably best not to change my thought process around a further drop.
Anyway, tomorrow will be entertaining, I am sure.
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.