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Sizing Up the S&P 500
- Potential short-term range on S&P 500:
- 5057: 2/27 low
- 5127: 3/4 low of 5127
- Potential “shooting star” on Monday
- Potential risks:
- First outside week since mid-October has begun
- High on 2nd session of March may open door to negative month.
- VIX making higher weekly lows
- Next catalysts:
- Tomorrow morning: payrolls
- Tue 3/12: CPI
Key News:
- Powell testimony leans dovish but is noncommittal
- Super Micro Computer (SMCI) replaces Whirlpool (WHR) in S&P 500.
- Deckers Outdoor (DECK) replaces Zions Bancorp (ZION)
- Ford Motor (F) EV sales +81% y/y in February
- Goldman Sachs bearish on EV battery metals (lithium, cobalt, nickel) amid oversupply.
- Target (TGT) earning beat estimates by 23 percent despite revenue missing by 1 percent. (See Margins below.)
- Apple (AAPL) nears October lows on weak Chinese sales
- Bank of America raises S&P 500 target from 5,000 to 5,400, but sees potential pullback.
- Jonathan Krinsky of BTIG: AAPL weakness may trigger broader pullback
Seven Catalysts for Stock Movement
- Volumes: More / less business
- Measured in units, orders, bookings. These often become revenue
- Margins
- Selling prices rise / input costs fall = wider margins
- Selling prices fall / input costs rise = narrower margins
- Macro trends
- Economic growth, interest rates, commodity prices
- Strategic Actions
- M&A, buybacks, spinoffs, dividends
- “Financial engineering”
- Credit
- Effective use of leverage can increase profitability
- Debt meltdowns can occur when business contracts
- Changes in interest rates can impact leveraged companies
- Business transformation
- Change in business model, products
- Example: software transition to subscription model, chipmaker embrace of AI vertical
- Investor rotation
- Typically occurs around quarters, years
- Can result from changes in six catalysts above
Note: Legal / regulatory risk isn’t included because the issue is typically often associated with catalysts cited above
Signals Scan
- Best Buy (BBY): Bullish outside day after “golden cross”
- Amazon.com (AMZN): potential “shooting star” on 3/4
- Tesla (TSLA): potential downside to $152 if $175 breaks?
- MGM Resorts (MGM): downside potential after gap lower?
- Nike (NKE): downside risk to September low under $90?
- Seagate Technology (STX): bearish outside day
Using the Platform
- “First bar” PaintBars are available over various time frames: Day, Week, Month, Year
- On Chart Analysis: Studies → Add Study → PaintBar
- Spans intraday, daily and weekly timeframes
- Also available on RadarScreen and Scanner
Upcoming Events
- Earnings tonight: AVGO, COST, GPS, MDB, MRVL
- Fri 3/8: Non-farm payrolls
- Tue 3/12: CPI
- Wed 3/13: Oil inventories
- Thu 3/14: PPI, retail sales
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