This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.
Otherwise, enjoy the column!
Subscribe to the Monster Stock Market Commentary and join the 2,408 subscribers getting it for FREE every day!
August 30, 2020
STOCKS – PFE, ACAD, NFLX, AMZN, CRM
Macro – SPY, QQQ
Mike’s Reading The Markets (RTM) Premium Content – NOW WITH A 2 WEEK FREE TRIAL
- What I Will Be Watching The Week Of 8.31.20
- Big Volatility Lies Ahead For Netflix
- An Amazon Drop May Be Coming
- A Monster Hedge Against Several Technology Winners
- Stagflation And Inflation Not Likely On The Horizon
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN ACAD
MICHAEL KRAMER OWNS QQQ PUTS
There will be a lot of market-moving data this week, with ISMs and Job reports. More importantly, these will have significant impacts on rates, and the movement of the dollar, which in turn will push commodities and the equity markets around.
At this point, the S&P 500 is significantly overbought and overextended on the RSI and even Bollinger bands. It seems like there still maybe a little bit more to come to the upside, with 3,527 acting as the next level of resistance, with the potential for an increase to 3,590. But based on the those RSI’s and Bollinger bands, we really should be turning lower at any point. Given how this market has no quit in it, we still need to be mindful of potential resistance levels should it continue to push higher. (Mike’s premium content – What I Will Be Watching The Week Of 8.31.20)
NASDAQ 100 (QQQ)
The Qs are also overbought, and they are inflicting a ton of pain on me because I bought puts on August 21, and it has been nothing but up. I noted this week that the Qs had been contained to this trading channel since late April. But I also mentioned in a midday commentary that it is possible the channel is widening and forming a megaphone pattern, based on two outliers on June 10 and July 13. If the pattern is widening, then there is a chance the Qs push up to around $301. The downside risk is still at the lower end of the channel, about $272.
It seems options traders are even getting rattled by the unpredictable nature of this market, which appears to defy a lot of logic. On Thursday, there was a straddle in Netflix put in place, suggesting the trader profits in either direction, but the stock needs to be below $424 or above $586 by the middle of October. Talk about uncertainty. (Mike’s premium content – Try it for the 2-weeks, FREE – Big Volatility Lies Ahead For Netflix)
It would seem there is a giant short-seller of Amazon out there, based on a considerable risk reversal options trade last week. I have been looking for this one to fall to around 2,800 for some time. Lucky for me, the stock hasn’t done much since the middle of July. (Mike’s Premium content – 1st 2-weeks Are FREE An Amazon Drop May Be Coming)
Salesforce’s equity trading desk had a fantastic quarter, and that helped to push the stock higher by over 25%. The chart doesn’t tell us much other than the fact the probably went up to much on a huge earnings beat that was not what it seemed. ( Free story – Salesforce.com’s Big Earnings Beat Driven By Stock Market Gains)
The market is not happy with everything happening for Acadia at the moment. The stock has fallen nearly 40% in a vertical market, not a good sign. The stock needs to hold the uptrend around $36, for a chance of a gap fill down the road up at $55.
Finally, I saw some bullish betting in Pfizer this week, and it seems like the stock is retesting a break on its way higher towards $42. (Free story – Pfizer’s Stock May Be Heading For A Big Breakout, Mike’s Premium content – Pfizer Call Buyers Come Back For Round 2)
Have a great Sunday
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.