7 Monster Stock Market Predictions – Week Of December 14

The New York Stock Exchange building.

It will be a busy week for the stock market, especially on Wednesday when the FOMC concludes its meeting and hosts its usual press conference. I am not expecting anything to change with this meeting; I don’t see what the Fed can do to change anything materially. It is possible the Fed could look to increase the purchase of QE, or perhaps do something like an operation Twist, where they sell the shorter-dated Treasury holdings and reinvest the money back into the longer-dated maturities to help control the long end of the curve a bit more.

But at this point, with the 10-Year yield up just 20 bps or so since the last meeting, it doesn’t seem like a time to freak out on that front. But if the Fed wanted to send an aggressive message about keeping rates low, that is one thing they could do.

Additionally, this week will be quadruple witching and the S&P 500 rebalance, along with the addition of Tesla to the index. We will be covering these two things a lot in the subscriber section this week. 

S&P 500 

This week, the likelihood is that the S&P 500 (SPY) heads lower, based on the current trends we have been observing. The uptrend in the index is broken, suggesting a drop with the potential to fill a technical gap around 3,620. Should it rise, which is possible on its path to 3,620, there should be firm resistance at 3,680. (Paid subscriber content – Three Potential Paths For The S&P 500 Over The Short-Term- The Week Ahead, the first 2-weeks are free to try).

Amazon 

Amazon (AMZN) possesses several bearish patterns, such as a triangle pattern, an RSI that is trending lower, and weaker volume levels. This past week, the stock fell below the uptrend around $3,120, which I think sets up a drop to around 2,870 over the next few weeks.

Broadcom 

Broadcom (AVGO) broke an uptrend last week after it reported results. For now, it is holding support around $400, and it would not be surprising to see Broadcom retest the breakdown by rising to around $415 before resuming lower towards $372.

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Disclosure: Mott Capital Management, LLC is a registered investment adviser. Information ...

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