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Stocks Consolidate But Today May Be A Problem

Published 09/15/2022, 04:07 AM
Updated 09/20/2023, 06:34 AM

September 14 was dull, with the S&P 500 trading between 3,910 and 3950. However, it has given the index an appearance of a consolidation day, and while it doesn’t have to, the day after the consolidation is typically when the follow-through comes. So if there is going to be another leg down to come, today may very well be the day that provides that move lower.

It has happened on a few occasions just since April as marked in the chart below, with the market both rising and falling.

S&P 500 Index Daily Chart

The index is also very close to breaking that big ascending broadening wedge. Yesterday, the S&P 500 was close to breaking the lower uptrend, around 3,920, and did briefly. Ideally, if you are a bear, you want to see the index gap lower today, below that trend line, and below 3,920.

S&P 500 Index 1-Hr Chart

Micron

Micron (NASDAQ:MU) has been very weak, and it may get even weaker. The shares are close to support around $52, and should that level of support break, the door to $49 opens, and potentially $46. The problem for Micron is that the relative strength index is even weaker, has been a clear long-term downtrend, and recently broke a short-term uptrend. Based on that, I think that Micron’s momentum is bearish and pointing lower. Earnings will be on September 29, so keep an eye on this one.

Micron Inc Daily Chart

Meta

Meta (NASDAQ:META) broke critical support yesterday when it fell below $155. The stock didn’t bounce back yesterday either, which is a weakness. The stock doesn’t have support until it returns to pandemic lows at $139. Yes, that is how far Meta has fallen.

Meta Daily Chart

Gold

I don’t usually talk much about gold, but sometimes I do, especially when it is at an inflection point like it is right now. It is very close to breaking support at $1,680; if that happens, there is nothing to support it until $1,565, which is about 8% lower. The momentum is negative, as noted by the falling RSI. Gold could also tell us something about the direction of the dollar and rates. A soaring dollar and rising rates are not good for gold, which is why the metal has acted so terribly. A breakdown in gold could tell us that rates and the dollar have much further to rise.

Gold Daily Chart

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