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Stocks Fall. More Downside To Come

By Michael KramerStock MarketsNov 10, 2021 01:30AM ET
www.investing.com/analysis/stocks-fall-more-downside-to-come-200607874
Stocks Fall. More Downside To Come
By Michael Kramer   |  Nov 10, 2021 01:30AM ET
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Stocks fell yesterday; it was a take’em down Tuesday, lite. The S&P 500 fell 35 basis points, and the Qs fell by around 70 bps. Later today we will get the CPI report and initial jobless claims because tomorrow, Thursday, is a bank holiday, which means the bond market is closed, though not the stock market.

Flattening Curve

Yesterday’s PPI data came in as expected, and that sent bond yields lower. Yields are falling over the world, which means the pressure and momentum on US yields will be lower. The 10-year fell by five bps to close at 1.44%, while the 2-year fell by 2% to 42 bps. That flattened the curve to 1%, and now it is sitting on a key level of support, resulting in the curve flattening down to 80 bps.

It has negative implications for global growth.

US10Y-US20Y Daily Chart
US10Y-US20Y Daily Chart

Risk Warning

Meanwhile, we are seeing a massive breakdown in risk, with the AUDJPY cross now sitting on a critical support at 83.15 after dropping a massive 94 bps yesterday. If it breaks support, which I think it will, it will fall to around 82.05. Another significant warning signal for stocks.

AUD/JPY 15-Min Chart
AUD/JPY 15-Min Chart

S&P 500

I am looking for a top here in the S&P 500 (via SPY), with a reversal back to 4,440 on the S&P 500 futures.

S&P 500 Emini Futures 1-Hr Chart
S&P 500 Emini Futures 1-Hr Chart

Tesla

Tesla (NASDAQ:TSLA) shares fell 12% yesterday and are just above support at $1,000. There is a huge gap that needs to be filled at $909. Gaps tend to get filled more often than not, and I would not be surprised to see that gap filled.

Tesla Inc Daily Chart
Tesla Inc Daily Chart

PayPal

PayPal (NASDAQ:PYPL) fell by 10.5% yesteray and below that critical support level at $212. The stock is momentarily oversold with an RSI of 22.5. But generally, true bottoms aren’t formed until we see a lower price and a higher low on the RSI. So PayPal may bounce, but I think we will see even lower prices.

PayPal Holdings Inc Daily Chart
PayPal Holdings Inc Daily Chart

Amazon

Amazon (NASDAQ:AMZN) is still flirting with this gap at $3,575, still has been able to break above resistance. I don’t see how Amazon can rally if the SPX turns lower. But whatever, I have been wrong before. I still think it heads to $3,300.

Amazon Inc Daily Chart
Amazon Inc Daily Chart

Original Post

Stocks Fall. More Downside To Come
 

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Stocks Fall. More Downside To Come

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Comments (4)
Scott Mccray
Scott Mccray Nov 18, 2021 9:37PM ET
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hindsight is not 20/20 as we bladt to new highs
SLM McKinney
SLM McKinney Nov 10, 2021 3:56AM ET
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The market drop yesterday. You hit it right on yesterday
Waqar Aslam
Waqar Aslam Nov 10, 2021 3:14AM ET
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Thanx
Reynard the Fox
Reynard the Fox Nov 10, 2021 1:44AM ET
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This author has been screaming about market crash at least since January while S&P 500 has been steadily growing to unprecedented heights in the environment of zero interest rate and inflation fears. It will probably continue growing for a very long period of time unless the feds raise interest rates.
 
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