Morning Comment: Watch the chip stocks for guidance

Wow, another wild day in the stock market yesterday. A 1.5% rally off the initial lows was followed by a 1% decline into late-morning. That, in turn, was followed by a 1.7% rally into mid-afternoon...which was then followed by another decline of 1.5%. Luckily, the market was able to see one bounce (a more mild one) into the close, so it was able to finish the day in positive territory. However, this is not the kind of action one sees in a healthy stock market.

If there is a silver lining to the dark cloud that this pull-back/correction is giving us, it’s that the lack of a new fiscal package from Congress is finally getting some of the blame for the decline.......Of course, we think the decline has a lot more to do with the fact that the stock market had become SO over-bought and over-valued...that it was going to take several “waves” of weakness to work-off those extremes. However, there’s no question that concerns over a lack of fiscal well as concerns about another “wave” of the pandemic...are helping fuel the decline during this renewed down-leg in this correction. (Lots of “waves” in our analysis right now. 😊)

Earlier this week, we highlighted our concerns about the technical condition of the European bank well as weakness in the broad STOXX Europe 600. We're also watching Germany's DAX index...which is testing a key support level on a technical basis.

On this side of the Atlantic, we're closely watching the chip stocks...and one name in that group in particular. The chips have been an important leadership group, so whichever way things break in the near future should be important for the broad market.

To see more details on these issues...and to get our insights on a regular basis, please click there to subscribe to "The Maley Report" (

Matthew J. Maley

Managing Director

Chief Market Strategist

Miller Tabak + Co., LLC

Founder, The Maley Report

275 Grove St. Suite 2-400

Newton, MA 02466


Although the information contained in this report (not including disclosures contained herein) has been obtained from sources we believe to be reliable, the accuracy and completeness of such information and the opinions expressed herein cannot be guaranteed. This report is for informational purposes only and under no circumstances is it to be construed as an offer to sell, or a solicitation to buy, any security. Any recommendation contained in this report may not be appropriate for all investors. Trading options is not suitable for all investors and may involve risk of loss. Additional information is available upon request or by contacting us at Miller Tabak + Co., LLC, 200 Park Ave. Suite 1700, New York, NY 10166.

Posted to The Maley Report on Sep 25, 2020 — 8:09 AM
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