Mass Hysteria in the Game of American Football
Also, one key economically sensitive stock stands at a critical technical juncture
The Patriots beat the Bills…the Giants beat the Eagles…& KC has a losing record. In the college game, many big names are not playing up to their usual standards…and what is going on at UNC is crazy…………...As Bill Murray once said, ”Dogs and cats…living together…mass hysteria!”
Home Depot (HD)…….This stock stands at a KEY technical juncture. So, how it acts over the rest of this month should be extremely important for the stock…and the housing sector.
What in the world is going on in the sport of football in America??? As we moved into the first few games of the season, there were some clear favorites for the Super Bowl…the Eagles and the Bills. On the flip side, after week 1, the Giants and the Patriots looked like they would be cellar-dwellers all year. However, in the last week…after beat the Eagles and the Bills…the Giants and the Pats look like two teams that could play each other once again in the big game at the end of the season!.....On top of this, the KC Chiefs have a losing record after five games!!!....What is going on here???
On the college level, the teams that we’re ranked #1 and #2 at the beginning of the season (Texas & Penn St.)…both have two losses already…and aren’t even ranked at all in the top 25! Yes, Ohio State still looks very good, but Georgia and Alabama both have losses…and there is no clear favorite right now. A good argument could be made for ANY of the top 10 teams could win the National Championship this season…..On top of all this, we have what’s going on with Bill Belichick at UNC. (Don’t get us started on that one!)......So, when it comes to football in America, we think Bill Murray’s quote from Ghost Busters says it best: “Dogs and cats…living together…mass hysteria!”
Needless to say, we are shocked, shocked that the markets are not reacting to this situation! However, with the HUGE level of volatility in both the college and pro games, it’s only a matter of time before it spills over into the marketplace! No, it might not impact the direction of either the stock or bond market, but it should definitely create some big moves…in both directions…as we move through October and November!
Okay, okay…the upcoming earnings season MIGHT be a LITTLE bit more important for what happens in the stock market…and the economic data (assuming we get it) MIGHT be a LITTLE bit more important for the bond market. Therefore, these two issues MIGHT have an impact on any pickup in volatility going forward. However, we still think what’s going on in the American football arena is a clear signal that we’re going to see some wild moves…in both directions…in the marketplace before too long.
In fact, it looks like we are definitely going to get the inflation data before too long…even if the government does not shutdown. The BLS is recalling some staff to ready the CPI report before the end of the month. This is needed because the final adjustments for things like Social Security checks need to be made this month. (There isn’t a politician in the country…from EITHER side of the aisle…that wants ANY problems with their constituent’s Social Security checks!!!)…..Besides, at some point, the government will get this thing resolved…and we’ll get a plethora of data before too long (God willing).
On the earnings side, things really get going next Tuesday morning…when several of the big bank’s kickoff the earnings season. However, this probably means that the next two trading days (today and Monday) will be relatively quiet. That said, we do still get the University of Michigan Consumer Confidence data this morning at 10:00am EDT…and that has been a market mover from time to time. Therefore, there is still a chance that we’ll get some volatility today……We also cannot rule out a major geopolitical development…as there are concerns that the US will invade Denmark this weekend…after the Nobel Prize committee announced that they did not give their Peace Prize to President Trump this time around. (It’s okay to chuckle at that one.)
One issue on the bearish side of the ledger is getting more attention this week…the weakness in the housing market. We’ll talk about this more in our weekend piece, but we still want to touch on the chart of one key stock in this group today. Home Depot (HD) has declined more than 10% over the past month…and it highlights the poor action in the group in recent weeks. However, the stock is now reaching a key technical juncture. So, it’s action over the next week or two should be important.
Looking at the chart below, you can see that HD has fallen just below its 200-DMA. That was something it did several times in 2024…only to rebound rather quickly. So, if it can do the same thing this time around, it will ease some of the concerns on this front. You can also see from the chart, that HD is getting very oversold. Thus, it looks like it should indeed be able to bounce very soon. However, if that bounce is a feeble one…and it rolls back over and falls below its 200-DMA in a more meaningful way, it will also take it below its trend-line from April. THAT would not be good at all for this very important stock in the housing group on the technical side of things. Therefore, this is something we’ll be watching quite closely over the rest of October.
