Stocks Finished Mixed Ahead Of Big CPI Report

I feel like this end-of-day write-up is overkill, based on the trends I see in the data. With that, I will not be providing this any longer daily. If you still wish to receive a copy of this, you can access it via my website for free and sign-up for the newsletter or follow me on Twitter. 

Stocks Finish Mixed Ahead of Key Inflation Data - Monster Market Commentary

September 13, 2021

Stocks - AAPL, DOCU

Macro - SPY, IEF, SPYV, SPYG

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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF APPLE

Stocks finished the day mixed with the S&P 500 up and the Qs down. Interestingly, today was the second trading day in a row where they gapped stocks higher, and those early morning gaps failed to hold. So the question is obviously what will happen tomorrow. We did manage to fill the gap at around 4,440, and to this point, that is the key level of support and it has held. Also holding was the October 2020 green uptrend line.

The daily chart looks as if today was more of an indecision day than a bottoming day. So tomorrow is likely to be interesting, especially since we get closer to options expiration on Friday. We should see volatility increase, and the typical pattern the last several months has been for the market to push lower into options expiration. Also, the index failed to get back above the 20-day moving average, which makes me think the sell-off isn't over yet.

Today was really all about the banks. The XLF ETF rose by more than 1% and was really what kept the S&P 500 up. Where the banks go seems entirely dependent on interest rates and their spreads. For some time, I thought there would be a bounce in rates and see them climb back to 1.5% before continuing to make a move down. But now, I'm not sure rates will even get the bounce to 1.5%. Tomorrow's CPI report will likely decide which way rates go, with a move above 1.38 sending rates back to 1.5%, but a drop below 1.3% sending the 10-year back to 1.1%. For now, the RSI is trending up, so I have to think the most likely direction for the 10-year is still higher.

Apple (AAPL)

Apple will have its big iPhone event tomorrow, and typically this has been a buy the rumor, sell the news event. Apple still has solid support at $145, with a drop sending it to $130. For now, the RSI is falling, suggesting Apple trades lower in the weeks that follow.

DocuSign (DOCU)

DocuSign slumped again today, but for now, it is holding on to support at $269. It is a key level for the shares because a drop below that support sends the stock much lower, with the gap at $199 still waiting to be filled.

Growth Vs. Value

The S&P 500 growth ETF is at the upper of its trading range relative to value. It would suggest that value outperforms growth in the future. The only problem is that it doesn't tell which way they go. Does value rise, and growth rises less? Or does value fall, and growth falls faster?

Hopefully, tomorrow provides some more clarity than today did.

-Mike

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