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5/15/22

STOCKS – SHOP, GE, JPM, INTC

MACRO – SPY, GOLD

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The Week of May 16 Is Likely To Be Volatile With Powell on Deck

On Friday, stocks had a big rally, with the S&P 500 rising by around 2.4%. But the rally looks shaky at best, and with Jay Powell due to speak on Tuesday afternoon at a Wall Street Journal event, there is a good chance that the gains from Friday vanish. The entire rally was built on a very unstable pattern which we have seen numerous times over the last several months. It is one with a big vertical push higher. Typically, these patterns have reverted to the origin in the days that follow, suggesting the gap at 3,930 on the SPX gets filled and the potential to fall back to 3,860.

Powell speaking on Tuesday creates this opportunity for the pullback at the beginning of the week, as traders are likely to start buying puts to hedge the risk of what Powell may say. However, given that the market has fallen six weeks in a row, and it is an options expiration week, making for a good chance that an early week pullback gets reversed by week’s end, with the index moving back to 4,055. However, if resistance at 4,055 is broken, the chance exists for a push to 4,120.

But ultimately, this week will be range-bound with a sideways chop.

The market’s overall health seems to be very weak and in a state of deterioration, which means that the bear market rally won’t last. The cumulative new highs-new lows on the NASDAQ make new lows after new low and shows no sign of stabilization. Typically, when the Nasdaq composite is near a bottom, there is a sign of the new highs minus new lows slowing or flattening, which is not even close yet.

Shopify (SHOP)

Stocks like Shopify had big moves on Thursday and Friday, but every time the stock has gotten back to its 10-day exponential moving average, it has failed to push any higher, with that being the case since it first started to fall back in December. The RSI continues to consolidate, but at this point, it is not clear that the bottom is in, but the downside is starting to look very limited.

GE has a very weak chart, with a big gap to fill down to $64.

Gold (GOLD)

Gold appears to be very close to breaking an uptrend, and if that uptrend fails, a drop to $1,675 seems possible.

Intel (INTC)

Intel keeps messing around with support around $43 and lives in a hazardous region. I think a break of support can send the shares sharply lower into the upper 30s.

JPMorgan (JPM)

JPMorgan appears to be getting ready for a more considerable drop. I think that will lead the stock to the shares falling to the big gap at $104 over the next few weeks.

I will leave it there more this week.

-Mike

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. 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.