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September 15, 2021
Stocks – ZM, XOM, QCOM
Macro – SPY
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- RTM Video – Inflations Worries Are Completely Overblown
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The bulls took charge and avoided disaster by holding the index above the 4,440 level. Not much was really accomplished today, with the index basically returning to yesterday’s highs. For now, the trend is still lower, with the next big trend level to watch for coming around 4,500. I think there is a lot of risk going into the end of this week and next. The Fed will start tapering before year-end. It is just a matter of when they start tapering, September or November. Additionally, this meeting will give us the famous dot-plots, with a chance for some of those expectations for when rates start to rise being pulled forward. There is no reason for the Fed not to taper, GDP growth at 3.7% is robust, and U6 underemployment reading below 9% is solid.
A tapering announcement should result in the 2-year rising and TIP yields rising. I fear that it will result in the long end of the curve falling, though, and there is the big risk. With TIPS and the 2-Year rising spreads across the yield curve will contract, and inflation expectations will fall. I think this will happen because rates globally are very low, which will suppress long-end rates, coupled with the fear that global growth is slowing. But the bond market will not be able to fight the Fed at the short-end of the curve, pushing shorted dated rates higher.
These spread changes are risk-off indicators if they play out, which will be a big problem for the market as we move forward. For now, resistance is around 4,500 if it should continue to rebound tomorrow after rising out of this rising wedge pattern today.
Exxon (XOM)
Exxon had a nice day following oils lead higher but couldn’t quite make it above the 50-day moving average. Additionally, there is still a downtrend to contend with on the RSI. If we can clear those two hurdles, then perhaps it can push higher to around $59. But much of that will also depend on what oil does.
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Qualcomm (QCOM)
Qualcomm fell today below support at $140. The trend in the RSI is still signaling lower prices are ahead for it, with support for the shares around $130.
Zoom (ZM)
Tomorrow could be a big day for Zoom. If it can rally, perhaps it has a path to filling the gap at around $340. The price made a new low today at support around $276, while the RSI did not make a new low. It is close, but that could be the start of a bullish divergence. Tomorrow will be important.
-Mike
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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.
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