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May 2, 2021
STOCKS – AAPL, AMZN, AMD
MACRO – SPY, IEF
Mike’s Reading The Markets (RTM) Premium Content – FREE 2-WEEK TRIAL
- RTM TWA- Yields Are Ready To Wreck Havoc
- 1Q’21 Thematic Growth Portfolio Update
- RTM MIDDAY – THE RALLY, MAY BE FINISHED
- Live Webcast Tomorrow At 1PM
- RTM Morning Note – Yields Are Rising, Watching Apple And Facebook
- Post-FOMC Thoughts
- RTM Midday- Maybe The Worst Of Both Worlds?
- RTM MIDDAY- RATES ARE READY TO HAVE A MASSIVE MOVE
- Facebook Earnings Preview- Need To Know Guide
- RTM MORNING NOTE- AMD MAY JUMP FOLLOWING RESULTS
- RTM MIDDAY – A LOT OF BORING
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL
It is going to be a busy week for economic data. Most of this data’s focus will be around inflation and economic recovery. Bond yields seemed to be positioned for higher than expected inflation, which means they are likely to rise. The 10-year has recently broken out of a bull flag pattern and seems more than ready to head up toward 2%.
A push of 2% will create issues for growth stocks and eventually for the entire market. Even though tomorrow is likely to be another of 1%er days as it’s the first day of May, and the first day of every month has been strong. (Paid content – RTM TWA- Yields Are Ready To Wreck Havoc)
But of course, now that I’m pointing this, the S&P 500 will probably be down 2% on Monday. I’m joking. I have no idea what will happen, but you can see that it is pretty hard to miss the strong monthly inflows on the first day of every month on the chart below. Of course, if we were down tomorrow, it would probably not be a good sign.
S&P 500 (SPY)
The index did break down on Friday, falling out a rising wedge pattern, and that is a bearish sign. However, there is a gap to fill, and a retest of the breakdown is needed. So at least for Monday, I think there is a good chance the index rallies and closes the gap at 4,210 and likely falls from there, completing the rising wedge pattern and starting a corrective phase.
This chart may also be telling us that something in the market is not looking strong. In the past, every time we have seen a divergence in the percentage of stocks above their 50-day moving average and the S&P 500, it has led to a sell-off in the index. We can clearly see that the number of stocks in the S&P 500 and diverging again, probably not a good sign of things to come.
Amazon (AMZN)
Amazon reported excellent results on Thursday night, but it wasn’t good enough to push the stock higher. In fact, the stock finished down on Friday. The stock was down more than 5% from its Thursday Afterhours highs, and I would call that a pretty significant reversal. Now maybe it was a gap fill; maybe it wasn’t. But I feel this was more than a gap-fill since the stock actually closed down on Friday, surpassing the gap, with it happening in the final hour of trading.
Apple (AAPL)
Hey, nobody is trying to knock Amazon. They did the same thing for Apple, and I have owned Apple for years, and I think Airtags are the coolest thing. I already pre-ordered mine. I could easily see myself having several of them because I lose everything.
These stocks are tired, and even though they have consolidated for Months, their valuations are still high, and all of this good news was expected and is why their valuation is high. So now they need some time to have their earnings catch up to their valuation. So that means they keep trading sideways, or they correct. I prefer a correction to get it over with it, then dragging on sideways price action for the next several months.
AMD (AMD)
The same thing happened to AMD, too, after great results. They don’t matter presently. There remains a very overwhelming downtrend in the RSI, which does not bode well for the stock.
That’s all for today.
Mike
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.
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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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