Stocks Little Changed As Options Expiration Looms
Michael Kramer | Aug 20, 2021 02:22AM ET
Stocks finished the day flat based on the S&P’s close of up 13 bps. The index goes into options expiration tomorrow down around 1.4% for the week. The index is closing in on the 50-day moving average and whether it comes into play or not is questionable, but that has happened on several occasions going back to November 2020. For the most part, that could be the biggest and important number to watch on the S&P 500. While it is entirely possible that level never even gets tested, that’s where I would focus my attention.
The index failed three times to overtake the 4,420 level yesterday. To see the index rally today, the S&P 500 will have to gap over that level at the open; I think; otherwise, it struggles.
The RSP index was weaker yesterday, falling by 22 bps, and as I said last week, I wasn’t convinced the equal-weighted S&P 500 broke out. It turned out it was right to wait because the ETF is down nearly 2% this week and has fallen below support at $152.50 and the 2020 uptrend. Additionally, the MACD is now turning lower as well.
The Russell is also broken down, falling below its 200 day-moving average for the first time in forever, and fell below the uptrend we had been watching closely. Look, it could easily snap higher today, but if it doesn’t, the RSI is likely to make a fresh low, and that is the last thing you want to see if you are hoping for a bottom.
Get The News You Want
Ford (NYSE:F) keeps dropping and is now trading below support at $12.75. The next big support area comes at $12.15; that is where a gap is just waiting to be filled.
General Motors (NYSE:GM) has the same struggles as Ford, and it seems that the next place for the stock to stop if support at $49 breaks could be around $45.25.
Micron's (NASDAQ:MU) floodgates are getting close to opening all over again, with a break of support at $70. There would be a huge drop ahead for its shares, probably back to $58.
Original Post
/h2
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.