7 Monster Stock Market Predictions For The Week Of Sept. 19
The S&P 500 and Nasdaq finished the week lower by around 5 and 6%, respectively. It is tough to find many bright spots in this market, especially with what is taking place in real rates.
Options expiration kept things from getting ugly on Friday; with $390 being the big gamma level on the SPY ETF, put owners were anxious to sell their puts going into the day's end once it became clear the S&P 500 index wasn’t able to break support at 3,840. So, that left the market with a late afternoon rally.
The internals on Friday was pretty bad, though, especially on the Nasdaq, with 451 more new lows on the day than new highs. That was the lowest reading since early July.
More importantly, the cumulative new high minus new low shows another new low being added on the cumulative count. It is something that I do not view as positive for the market overall, and it is just another warning sign that new lows are coming to this market sooner than later.
QQQ vs. TIP
The QQQ runs about 12 days behind the TIP ETF, and the decline in the QQQ is coming on schedule. Based on the TIP, the QQQ isn’t likely to see much of a rebound anytime soon, either.
S&P 500 (SPY)
As far as where the market is going this week, I have decided to try and not predict the weekly movements in the market this time because I do not want that to be confused with the conviction I have that market is heading to the June lows and is highly likely to make new lows. Additionally, the 2008 analog suggests that between now and Oct. 25, the outlook for the S&P 500 and the Nasdaq could be brutally painful.
Zoom (ZM)
Zoom is the poster child for stocks making new lows on the Nasdaq. Zoom, in my observation, has been one of the greatest leading indicators of where the market is going overall. It's no surprise, then, that Zoom just made a new low on Friday. That said, Zoom probably isn’t finished falling either, with the following significant support seen at $76.45 and then $70.
Emerging Markets (EEM)
If you want to see the effects a strong dollar is having worldwide, look no further than the EEM ETF, which made a new low on Friday and is probably heading even lower. Support at $38 has broken, and the next support level doesn’t come until $36.45.
DocuSign (DOCU)
Docusign jumped after its results, but this stock is no different than Zoom, and those gains are melting quickly. Like Zoom, Docusign will probably be added to the stocks on the Nasdaq making new lows very soon. There is no support until $46.85.
DoorDash (DASH)
DoorDash is getting ready to travel up the stairway to heaven with that massive descending triangle, and it has been sitting just above support at $56.80. DoorDash will probably be another stock added to the growing list of stocks making new lows.
More By This Author:
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Disclosure: 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 ...
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