7 Monster Stock Market Predictions For The Week Ahead
Michael Kramer | Oct 17, 2022 00:42
Stocks had a rough Friday after a failed rally attempt on Thursday. The S&P 500 fell by more than 2% on Friday to close the week lower by more than 1.5%. The bearish rising cup and handle pattern I had pointed out on Thursday followed through on Friday and resulted in the index close at 3,583, which took it back to Wednesday’s level.
Typically, a rising cup and handle pattern returns to the cup’s lows, around 3,500. Additionally, the decline on Friday serves as a rejection of the Thursday rally, and typically Friday sell-offs follow through into Monday.
The NYSE Advance-Decline made a new low on Friday, perhaps leading the way to a new low in the S&P 500. It would suggest that the lows on Thursday were not a capitulatory event, and the lows for the market are probably not in.
Additionally, rates continue to rise, and it’s hard for me to think that we could continue to see rates rise and equity prices bottom. So, as long as rates continue to make new highs, then stocks should continue to make new lows. The 10-year yield made a new closing high from Friday, finishing the day at 4.02%. A forecast of the more recent move higher off the October 4 lows suggests the 10-yr could climb to around 4.4%.
Well, so much for ARK Innovation ETF (NYSE:ARKK) rallying. The ETF continues its descent, as the RSI suggested the other day. At this point, one can only hope it finds some support at the lower end of its trading channel at approximately $31.50.
Get The App
Tesla (NASDAQ:TSLA) will report results this week, and the chart looks awful, as it trades just slightly below support at $205. If that support level breaks, there is nothing until $180, and of course, there is that gap at $137, that still needs to be filled.
With Amazon.com (NASDAQ:AMZN) giving back all of those summertime gains, it might as well retest the lows around $102. I think we will find out that $102 is not the bottom.
Netflix (NASDAQ:NFLX) looks like it is in a distribution pattern, suggesting the shares return to where the rally started at $170.
Twilio (NYSE:TWLO) keeps melting as well, and with support now in play at $63, the drop to $44 becomes a possibility.
We can finish off with one of my favorites. Roku (NASDAQ:ROKU) is just melting away, trading at levels not seen since 2019, and with a gap to fill at $34, I think there is still a good chance it will get there.
Check out the video below for more on why S&P 500's decline may not be over yet:
Original Post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.