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4/2/22
STOCKS – INTU, NVDA, SQ
MACRO – SPY, QQQ, VIX
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S&P 500 (SPY)
The S&P 500 finished the week unchanged and has not indicated what it wants to do next. The index attempted to break higher during the week, clearing resistance at 4,580, but that looks like a failed breakout attempt after closing well below it by Friday. There is a chance the index completes the gap fill at 4,660, but if that doesn’t happen earlier in the week, I don’t like the odds of it happening.
VIX
There is a good chance the S&P 500 will struggle to start the week. The FOMC minutes pose an unknown to the market and likely contain plenty of hawkish language around the potential balance sheet run-off. With the VIX under 20, it seems that traders do not have enough hedges in place and will likely be buying puts heading into that event, which should put downward pressure on stock markets. The VIX has been trending higher for months and is now sitting at the bottom of that trading channel.
Nasdaq (QQQ)
The substantial wage gains in the job report and hotter than expected prices paid index in the ISM sent real yields soaring on Friday and caused the Treasury curve to invert. The higher yields rise, the harder it will become for the market to stay at current levels. The relationship between the QQQ and TIP ETF is powerful, and a wide gap has opened between the two recently. In this case, I think the QQQ needs to trade down to the TIP.
Nvidia (NVDA)
Sure enough, Nvidia fell back below support around $268, and that price now becomes resistance. The significant uptrend in the stock is broken, and the gamma squeeze is over. I think $231 is in the stock’s near future.
Intuit (INTU)
Keep an eye on Intuit; it looks like there is a bear flag that has formed, and a break below $419 sets up a significant drop to $325.
Block (SQ)
Block may have stalled out at $133, with the RSI clearly in a downtrend. It seems like the perfect place for the stock to stall out, resume the downtrend, and for the RSI to head to 30 while the shares fall back to $105.
That’s enough for this week. See you Monday.
Mike
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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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