The S&P 500 finished the day, yesterday, lower by 11 bps to close at 4,241. The move lower didn’t seem to be triggered by any news, but Dallas Fed Governor Kaplan was out around 3:40 PM, noting he forecast the first rate hike in 2022.
Remember, in May, Kaplan was the first Governor to emphasize that now was the time to talk about tapering. Now he is going out and talking about raising rates in 2022.
So clearly, Kaplan has the job of playing the “bad” Fed Governor, the one that has to go out and talk about the hawkish policy. But given that he is now talking about this, we should be prepared for the Fed to signal before year-end to the market for a potential rate hike in 2022.
S&P 500
My chart in the S&P 500 futures suggests we have completed wave “B” and are likely pushing into the wave “C,” resulting in the index moving lower back to 4,120.
Housing
Wednesday's housing sector was weak, falling by 90 bps, following disappointing new home sales. We can see that the index fell sharply going into the final few minutes of the day.
Walmart
Walmart (NYSE:WMT) looked very weak, sitting on support at $135.75 and an RSI that was trending lower. The gap from mid-February was closed, and the stock resumed its lower trend that started in December. It may just be a matter of when the stock falls back to $130.
Palantir
Palantir Technologies (NYSE:PLTR) was nearing a breakout, which could send the shares higher to $29.90. The only problem was that the stock was nearly overbought with an RSI at 70 and a MACD close to converging. So a move to $29.90 may be a fast and short-lived trade.
Zoom Video
Finally, Zoom Video (NASDAQ:ZM) was at $376, where I thought it’d climb to. The downtrend is overpowering, and that break-out will not be easy. It is possible, but I doubt it is likely given the stock’s valuation and some indicators. I expect the downtrend to retake control of this stock.
