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4/17/22
STOCKS – AMD, GOOGL, NFLX, JPM
MACRO – QQQ, TIP
Mike’s Reading The Markets (RTM) Premium Content – $65/MONTH OR $520/YEAR – The First 2-weeks are FREE to try.
- RTM Tactical Update: The Fed Will Drain The Stock Market Of Excess Liquidity
- RTM Exclusive: Betting JPMorgan’s Decline Aren’t Over [Short-Term Options Idea]
- RTM Exclusive: Walmart Shares May Pullback Amid Weak Consumer (Short-Term Option Idea)
- RTM: Real Yields Still The Driving Force
- RTM: Yield Curve Steepens (Daily Update)
- RTM: Netflix Faces Further Declines Following Results [Short-Term Options Idea]
- RTM: Real Rates Weigh On Stocks
- RTM – ADBE [Internals Notes]
- RTM – AMD [Internals Notes]
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN GOOGL
The stock market sold off hard on Thursday afternoon as we went into the long weekend. The S&P 500 index dropped by 1.2%, while the QQQ ETF fell by more than 2%. The declines on Friday resulted in the gains from Thursday disappearing entirely.
NASDAQ (QQQ)
The NASDAQ futures may give the best representation of where things stand in the market, currently sitting on support at 13,890. A break of that support level sets up a more significant drop in the market, with the potential to decline to 13,470 in the days ahead.
But this is a tricky period for the market because post options expiration, the market tends to see follow through the first two days of the week and then reverse by mid-week. That would indicate that the market moves lower to start the week and then reverses by the week’s end.
I suspect that the market tries to test that 13,470 level early in the week and then moves back up to resistance at 13,890 by the week’s end.
Real Yields (TIP)
The other problem for the NASDAQ is that the TIP ETF keeps dropping, and as long as the TIP ETF drops, it means real yields are rising, which is terrible news for the NASDAQ and many of the technology stocks in it. The next level I am looking at is $120, but we did see some big options bets about two weeks that suggest it goes back to $117, which indicates positive real rates on the 10-Yr TIP. (The first two weeks of my SA Marketplace service are FREE to try; cancel if you hate it – RTM: Betting Real Yields Go Much Higher [Short Term Options Idea])
AMD (AMD)
AMD was very weak again on Friday, making a new closing low. The chart looks very weak, and the shares are getting to a point where we have to start wondering if the market sees an earnings downgrade cycle coming. The PE ratio at 19.5 is at its lowest level in some time, and that can only make one believe that investors are getting worried about current earnings estimates being too high and the potential for them to drop. The next logical place for the stock to find a bounce comes around $89.5.
Alphabet (GOOGL)
Alphabet is at a critical spot, as it sits on support at around $2,500. The stock has tested this level multiple times, but I’m not sure it can hold much longer, with this being its 6th such attempt. If it breaks this time, it starts a drop to $2,430, and probably further to $2,260.
Netflix (NFLX)
Netflix will report results on Tuesday after the close of trading. I noted during the week in a write-up for subscribers to my SA Marketplace service that expectations for results have dropped significantly for the first quarter. With the second quarter’s historical the weakest quarter for Netflix, the chances are rising that Netflix may see lower prices following results. The chart is not bullish, and the shares are approaching their lows, last seen in mid-March. A drop below $330 sends the shares to $300. (The first two weeks of my SA Marketplace service are FREE to try; cancel if you hate it – RTM: Netflix Faces Further Declines Following Results [Short-Term Options Idea])
JPMorgan (JPM)
JPMorgan was very weak following disappointing results. Big bearish bets were placed on the stock that suggests further downside risk, and the chart shows there is no support until it gets to $122. (The first two weeks of my SA Marketplace service are FREE to try; cancel if you hate it – RTM Exclusive: Betting JPMorgan’s Decline Aren’t Over [Short-Term Options Idea])
I hope you are having a great 3-day weekend; see you tomorrow.
-Mike
Mott Capital Management, LLC is a registered investment adviser in the State of New York. The 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. Please remember that past performance may not be 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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