ST trading
I'm going to start using the above label, so people who couldn't care less what AMAT will do short-term, can ignore posts like this.
Since October 2000, AMAT has been between 40 and 50, 90% of the time. There have been a few brief excursions, extending the range 5 points above and below there. So, even a move to 35 or 55, I wouldn't consider as breaking the pattern. Anything above 55 or below 55, and the market is probably making a important re-evaluation of the stock, and a major move is immanent.
Inside the 40-50 range, there seem to be 2 smaller ranges: 40-45, and 45-50. The stock seems to spend a few days, as much as 2 weeks, in the upper 45-50 range, and then go down and visit the 40-45 area. Having broken below 45 today, I'd expect it to now spend 2-10 days in the 40-45 area, and hit 40 at least once.
Likewise, after it has spent some time in the 40-45 area, once it breaks above 45, I'd expect it to hit 50 soon.
The market is already expecting, and has discounted, a 1/2% rate decrease, and is hoping for 3/4%. My guess is, 1/2% is the most the Fed will do. If they were going to lower in bigger increments, they'd have done so in the two earlier moves. They don't want to appear panicky. So, I doubt we get a Fed-induced market rally. Again, just my guess. If the market was expecting less than a 1/2% cut, I wouldn't hold shorts through the Fed meeting.
So, I'm holding my AMAT short, for now, expecting 40 soon. |
