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May 16, 2020
Stocks – AAPL, AMZN, GOOGL, FB, MSFT
Macro – SPY, QQQ
Short-Term Trends – Cautious
Long-Term Trends – Bearish
Mike’s Premium content – $35/month or $300/year
- The 3 Keys To The Week Of May 18
- Update Earnings Trends
- OPTIONS WILL DICTATE DAYS END
- Economic Data And Trade Tension Sinking Stocks
- 5.14.20 – Webcast Replay
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The week of May 18 will be slower from an economic standpoint, but Jay Powell will speak on Tuesday and Thursday, as well as the release of the Fed minutes on Wednesday, there will be plenty of things that could move the markets. Premium content – The 3 Keys To The Week Of May 18
S&P 500 (SPY)
The S&P 500 could see some more downward pressure based on the technical charts. There is a downtrend that developed last week after the index peaked on May 11. There is also a potentially bear flag that formed on the intraday chart.
The daily chart shows that the index appears to have fallen outside of a rising wedge, indicating that S&P could be heading lower from here. Should the index drop below 2730, it could set up for a much steeper decline towards 2,500. Also, notice that the advance/decline line and the RSI have started turning lower, a potential shift in trend. A more precipitous decline to 2,500 would take, let’s hope, a couple of weeks to play out.
Keep an eye on the number of stocks in the S&P 500 that are above their 100-day moving average. That measure appears to be losing momentum, as does the number of stocks above their 50-day moving average.
NASDAQ 100 (QQQ)
The Qs also found itself resting on an uptrend, which seems likely a somewhat significant uptrend. The RSI has turned lower, and if that is a sign of things to come, than it probably means the Nasdaq 100 is heading lower, with the Qs moving to $203 to start.
Meanwhile, the number of stocks in the Nasdaq 100 above their 50-day moving reached near record-high levels. It, too, has started turning lower, yet another sign that momentum may be shifting.
You know what is super scary is that the top 10 stocks in the Nasdaq have a 56% weighting in the Nasdaq 100. Even worse, those same stocks have a 25% weighting in the S&P 500. Meanwhile, 5 of those stocks have a 45% weighting in the Nasdaq 100 and a 21% weighting in the S&P 500. So where these next five stocks go, the markets will go.
Microsoft (MSFT)
Microsoft is one of those stocks, and shares have been resting on an uptrend, while its RSI has started turning lower. A break of that uptrend gets shares moving lower towards $161, which would also push the stock below its 50-day moving average.
Apple (AAPL)
Apple has already fallen below its uptrend, and all it will take is a drop below $295 to see the stocks move lower towards $265. Its RSI has also started to turn lower as well.
Amazon (AMZN)
Amazon has already broken its uptrend, and the RSI is already flashing a bearish divergence suggesting the stock falls back to $2,100.
Alphabet (GOOGL)
Alphabet has been rising in a perfect channel higher, but news late Friday about an antitrust suit could spoil the trend. A break of the uptrend creates the potential for a drop back to $1150.
Facebook (FB)
Facebook has been rising in a similar channel as Alphabet, and RSI reached overbought levels at 70 and that RSI is also changing trend, and that means Facebook may facing a decline to around $191.
Anyway, have a great Sunday!
-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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