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#STOCKS: #ASML, #SMH, #RSP,
#MACRO: #NDX, #HSI, #COPPER, #DJIA
ASML IMPACTS
The NASDAQ 100 fell by 1.5% today, led lower by the semiconductor sector, with the SMH ETF dropping by more than 5%. This decline was driven by a more than 16% drop in ASML, which reported weaker-than-expected bookings for the third quarter and provided a softer-than-expected outlook for 2025.
ASML, a stock up by almost 50% earlier this year, is now down by around 2% for the year, meaning all of its earlier gains have been erased.
The SMH ETF was weighed down all day by the drop in ASML, leading to a nearly 6% decline. The big question now is what happens next. Yesterday, there was an attempt to break the SMH out above the top of the triangle pattern, but today, the SMH fell back into the range and broke through the lower trend line.
If yesterday’s rally was a throwover (a false breakout), and today’s move is the real direction, then the SMH could have much further to fall from current levels, with the next support zone somewhere in the low $230s.
WEDGES
The NASDAQ also broke below its uptrend today, which could be part of a rising wedge or a bump-and-run pattern. If this break holds, it could signal a further move lower from current levels.
The RSP (Equal Weight S&P 500 ETF) also has a rising wedge pattern forming, and if this pattern plays out correctly, the move higher may be nearing its end.
The same rising wedge pattern is also present in the Dow Jones Industrial Average. If this pattern holds, the move higher could be coming to an end there as well.
CHINA
Meanwhile, Hong Kong is expected to open lower again tonight, with Hang Seng futures down by more than 1% today. So far, the market hasn’t been overly impressed by China’s “Bazooka” stimulus. Since the last press engagement failed to boost market sentiment, China’s housing ministry, MOF (Ministry of Finance), and PBOC (People’s Bank of China) are scheduled to hold another briefing on Thursday.
If this meeting goes as poorly as the previous ones, the 20,000 level on Hang Seng futures becomes critical. A break below this support could lead to a move into the 18,000 range.
Certainly, based on how copper has been trading, it seems the market believes that China hasn’t fired a “Bazooka” at all. Copper prices look like they could move lower from current levels. The critical level to watch is $4.29. If copper falls below this support, the next move could take it down to $4.10.
Have a good one!
Mike
Charts used with the permission of Bloomberg Finance L.P. 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.
Subscribe to receive this FREE daily commentary directly in your email
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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