Technical analysis: the Fed hikes, bank stocks and oil stocks fall, chip stocks rise with Intel and Marvell
On Wednesday 16 September the Federal Reserve raised rates by 25 basis points, its first hike since 2023, and press reports describe a tone that leaves room for another increase before year end. Wall Street closed lower, with banks and oil taking the hit, while European markets and Milan in particular moved the other way.
In this edition you will find the technical analysis of the names that made the session, with our model's position on each. On US stocks: Goldman Sachs stock and American Express stock lower with the financials, Occidental stock and ConocoPhillips stock dragged down by crude, and semiconductor stocks higher, with Intel stocks and Marvell stock among the best of the day while software slipped. In Europe Siemens Energy and RWE led a positive session, and on the Milan market Prysmian topped the list while Stellantis fell after a broker downgrade. Our trading strategy on each name is stated below.
Our model made most of its money on the short side yesterday: Goldman Sachs and American Express among US banks, Stellantis in Milan. Every reading comes from a systematic model, that is ai trading applied to about 450 instruments, and they remain references: the choice always belongs to whoever trades.
The Federal Reserve lifts rates to 3.75-4.00% and the US market reads a hawkish turn
The Federal Reserve raised its policy rate by 25 basis points, to 3.75-4.00%, in a unanimous vote. Press reports say the new projections show 16 of 18 members expecting at least one more hike this year, with the ten-year Treasury yield back above 5% and the two-year up more than 7 basis points. On our data the dollar gained 0.6% and equity volatility rose 3%.
US indices reacted unevenly. S&P 500Long, the ETF on the S&P 500, lost 0.44%, Russell 2000 ETFShort on small caps 0.43%, while Invesco QQQ TrustLong on the Nasdaq 100 closed flat, up 0.03%. Among the most rate-sensitive sectors the US real estate ETFShort fell 0.60% and the US utilities ETFShort finished unchanged.
Wall Street: Goldman Sachs, American Express and Robinhood stock fall with financials, Occidental and ConocoPhillips with crude
Financials took the most out of the S&P 500. Robinhood stockLong lost 5.46%, Coinbase stockLong 4.42%, Goldman Sachs stockShort 3.96%, American Express stockShort 3.70%, Wells Fargo stockLong 2.98% and Bank of America stocksLong 2.72%. The declines were milder for Visa stockLong, down 1.25%, and JPMorgan Chase stockLong, down 1.01%.
Energy fell for a different reason, one that has nothing to do with rates. Press reports cite an industry estimate of a 7.1 million barrel build in US inventories, with Brent slipping towards 104 dollars from four-month highs; on our data crude lost 3.2%. Occidental stockLong dropped 6.55%, ConocoPhillips stocksLong 6.15%, Exxon stockLong 3.54% and Chevron stockLong 2.86%.
Italian market: Prysmian stock leads, Enel and utilities rise, Stellantis stock falls after a downgrade, Intesa cleared on its Generali stakes
Press reports put the Milan index up 0.8%, with the Italian-German bond spread narrowing to 86 basis points. On our data Prysmian stockShort was the best performer, up 3.38%, followed by LottomaticaLong, up 2.76%. Utilities rose together: ItalgasShort up 2.42%, A2ALong up 2.04%, Enel stockShort up 1.80%, HeraShort up 1.73%. Also higher were STMicroelectronics stockShort, up 2.02%, Ferrari stockLong, up 1.20%, and Leonardo stockShort, up 1.06%.
Two corporate stories. Stellantis stockShort lost 3.33%, the worst on the market, after Berenberg cut its rating to hold and, according to press reports, its price target from 7.8 to 5.1 euros. MFE-MediaForEuropeShort fell 2.64% after half-year results: revenue of 2.95 billion euros against 3.14 billion pro forma a year earlier, with adjusted net profit up to 50.5 million. And the offer for Monte dei Paschi cleared its first hurdle: the Italian insurance supervisor authorised Intesa Sanpaolo to acquire the indirect stakes in Generali and in the Monte dei Paschi insurance joint ventures. Intesa Sanpaolo stockLong gained 0.60%, GeneraliLong 0.55%, while Monte dei Paschi stockLong slipped 0.14%. Other banks moved little, with MediobancaLong up 0.42% and UniCredit stockLong up 0.41%; Eni stockLong fell 0.80% with crude and NexiLong 1.30%.
Semiconductor stocks hold up the Nasdaq with Intel, Marvell and Arista while software slides with Intuit, Adobe and Salesforce
US technology split in two. Semiconductors and computing infrastructure rose: Intel stockShort up 4.03%, Applied Digital stockShort up 4.14%, Marvell stocksLong up 3.61%, Arista Networks stockLong up 2.44%, AMD stockShort up 1.65% and Nvidia stockLong up 0.82%, with Qualcomm stockLong bucking the move at minus 1.58%. Application software went the other way: Intuit stockLong down 3.38%, Adobe stockShort down 2.82%, Salesforce stockLong down 2.00%, ServiceNow stockLong down 1.47% and Microsoft stocksLong down 1.37%.
The most telling case sits outside the large names. Blaize stockShort gained 9.19% on volume 3.2 times its median, and 84.5% of that volume was classified as selling: the price rose while most of the trading was heading for the exit. At the other end First Solar stockShort lost 5.57%.
Europe: Siemens Energy and RWE lead the rally, banks and luxury rebound, German carmakers lag
The continent closed higher, untouched by a US decision that came after European markets had shut. On our data Siemens Energy stockShort gained 3.10%, RWE stockLong 2.81%, National GridShort 2.16% and Adidas stockShort 1.94%; Infineon stockShort 1.23% and Siemens stockShort 0.66%. Banks bounced, with Societe GeneraleShort up 1.25%, Barclays stockShort up 1.07%, BNP ParibasShort up 1.01% and Deutsche Bank stockLong up 0.87%, and so did luxury, with LVMH stockShort up 1.11% and EssilorLuxotticaShort up 0.48%.
German carmakers trailed, with Volkswagen stockLong down 2.64% and Mercedes-Benz stockLong down 2.57%, along with software, where CapgeminiLong lost 2.81% and SAP stockLong 0.28%. Shell stockLong fell 2.08% with crude.
European indices: Milan leads the day, Frankfurt's forming reversal sits one point from being withdrawn
On Wednesday FTSE MIB ETFShort, the ETF on the FTSE MIB, gained 0.85%, CAC 40 ETFShort 0.66%, DAX ETFLong 0.56% and FTSE 100 ETFLong on the FTSE 100 0.19%. Four gains, with the Italian market in front.
On the weekly structure the four baskets remain split. Milan has been on a sell since the week ended 4 September, with the typical price of the week in formation 2.95% below the level: the rebound has trimmed the signal's gain to 0.23%. Paris has been on a sell since 24 August, 2.66% below its level, with a 3.09% gain. London stays on a buy from April, 0.43% above. Frankfurt, on a buy from April, carries a sell reversal on the candle still forming: measured against the level it was triggered from, the typical price sits 0.99% below.
The ETFs that moved the session: the energy ETF, the Vanguard energy ETF, the financials ETF, the semiconductor ETF, the gold ETF and the European utilities ETF
XLE — the Energy Select Sector SPDR, that is the energy ETF — lost 2.88%, last of eleven sectors, and VDE — Vanguard Energy, the Vanguard energy ETF — 2.94%. XLF — the Financial Select Sector SPDR, the financials ETF — shed 1.62% on rate decision day.
SOXX — iShares Semiconductor, the semiconductor ETF — gained 0.64%. GLD — SPDR Gold Shares, the most traded gold ETF in the world — lost 0.61% as the dollar firmed. In Europe EXH9 — iShares STOXX Europe 600 Utilities, the European utilities ETF — topped the grid with 1.77%.
The new buy signals: four names back above entry
The weekly cohort was born at Friday 11 September's close: 15 new buy signals, 10 tradable. From Tuesday to Friday this card publishes only what changes — who crosses above or below their entry level, who flips side on the daily signal, who reports earnings, who leaves the cohort.
Yesterday brought four changes, all in the same direction: LottomaticaLong, Tenaris stockLong, SabespLong and the European telecoms ETF EXV2Long moved back above their own entry levels. Nobody flipped side on the daily signal, which stays a sell on Nokia stockLong, LegrandLong, Micron stockLong and Taiwan Semiconductor stockLong, and none of the fifteen reports earnings in the next seven days.
This week's earnings: Carnival and FedEx today, Costco next Thursday
Three companies in our universe report between now and next week, the first two today.
Thursday 17 September
Carnival Short
FedEx Long
Thursday 24 September
Costco Wholesale Short
Technical analysis of SPY and QQQ: SPY flips to a forming sell by 0.04%, QQQ defends its level
SPY, the ETF on the S&P 500 S&P 500Long, closed Wednesday down 0.44%; QQQ, the ETF on the Nasdaq 100 Invesco QQQ TrustLong, up 0.03%. Applying sector moves to each basket's weights, SPY should have lost 0.49% and QQQ 0.25%: the tech basket beat its sectors by 28 hundredths of a point, thanks to semiconductors.
On the weekly the two baskets parted ways. On SPY the typical price of the week in formation slipped 0.04% below the level of the uptrend opened on 6 April, and the signal on the current candle turned to sell: provisional, borderline, to be confirmed on Friday. SPY is in its twenty-third week, with every profit taking window reached and a gain of about 11%. QQQ touched an intraday low of 700.00, 34 cents below its own weekly Inversion Point, and closed with the typical price of the week 0.79% above: the buy signal born on 10 August holds.
The bigger picture: after the Federal Reserve
The Federal Reserve delivered what the market expected, and its tone added another hike to year-end expectations. The reaction hit the US market where banks and energy weigh most, while Europe, closed before the statement, and Milan in particular had a positive session on their own drivers: utilities, grids and semiconductors. The signal that matters most for the coming days sits on the S&P 500, which flipped to a sell on the forming candle by 0.04%, and Friday's close will tell whether the cycle that began in April ends here. The underlying problem has not changed in five weeks: participation in the rally keeps narrowing, and yesterday it fell another 6.3%.
What you find here. If you are trying to understand how to manage risk in trading — stops, break-even stops, trailing, and the declaration of stops that have been taken out — or how to read chart patterns (double bottoms, Bollinger bands, the Ichimoku cloud, price action trading), this is the desk's trading journal: published every morning before the US premarket, with our model's position on every instrument mentioned.
The full analyses behind the cards on this page.
* Our system — The rows of names at the foot of each card carry our model's position, long or short. Position from the latest published weekly analysis. Levels, targets and the trading plan sit in each instrument's own page. The two letters in brackets lead to the instrument page (G) and the full analysis (P).