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May 3, 2020
STOCKS – AMZN, NFLX, MSFT, AMD, NVDA
MACRO – SPY, QQQ
MIKE’S READING THE MARKET PREMIUM CONTENT
- Volatility May Be High With Significant Downside Risk Starting This Week
- Many Signs Point To Lower Equity Prices
- Earnings Continue To Detoratiate
- A Significant Number Of Uptrends Have Broken
- Volatility Rising – Morning Commentary
- Understanding On Close Imbalances
It will be a hectic week as earnings begin to wind down, and economic data flood the headlines. ISM Non-Manufacturing data, ADP private payroll, and the BLS job report will come throughout the week, and these are as important as they come. It could very well set up the direction for the market for the next month.
Unfortunately, I am not bullish on equities at this point, and I haven’t been since the end of March. I know, you think I missed the big rebound. I haven’t because I have still been invested; all I did was raise my cash position, and de-risk my portfolio. So you can be bearish on the market and still be invested, it is just how you position your portfolio that matters.
S&P 500 (SPY)
Anyway, this past week finished on a low note, and I fear we may see things grow worse, especially given how the indexes closed on Friday. The S&P 500 fell out of the rising wedge on Friday. The level around 2,800 is a considerable level based on dealer gamma positioning, with a break likely resulting in a spike in volatility. You can see on the chart that 2,800 is also a critical support level, not a coincidence. Should the index crack 2,800, the S&P 500 could easily fall to 2,720. Premium content – Many Signs Point To Lower Equity Prices
NASDAQ (IXIC)
Meanwhile, the NASDAQ fell below an uptrend and support level that formed off the March lows, and I fear that it is a strong bearish sign. If the index can re-take that uptrend on Monday or Tuesday, then perhaps we can continue to rise. I think it is more likely we head to 8450.
Amazon (AMZN)
Amazon is nearing an uptrend, with a break setting up a drop to 2,095. Free story- Amazon’s Pullback May Only Be Starting
Microsoft (MSFT)
Microsoft isn’t cheap at these levels, despite having a strong future. I think the stock move lower to $161. Free story – Microsoft’s Stock May Struggle To Rise Despite Massive Earnings Beat
Nvidia (NVDA)
Nvidia has stalled out, and I think shares move lower to $256.
AMD (AMD)
The next level of resistance for AMD comes at $46.25.
Netflix (NFLX)
I think Netflix continues lower as well back to $386.
Have a good week
-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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