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February 18, 2021
STOCKS – BAC, TSLA, BABA, UBER
MACRO – SPY, LQD, TIP, TLT
Mike’s Reading The Markets (RTM) Premium Content – FREE 2-WEEK TRIAL
- T.W.A – Are The Bears Back?
- NVIDIA: Covered Call Strategy Ahead Of Results
- 2.19.21 Chatboard And Live Stream Replay
- Midday – Rates Are Breaking Out
- MORNING NOTE: BUCKLE UP, THINGS MAY GET MORE VOLATILE AFTER TODAY
- Midday Note- Fillin’ Gaps
- Morning Note: Futures Approaching Key Support As VIX Jumps
- What Inflation Is According To The Fed
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN TESLA
Rates will likely be all of the focus this week, especially after the big move higher last week across the yield curve. The 10-year jumped to finish last week around 1.35%, while the 30-year closed at 2.13%. It seems possible these rates are likely only to rise further, especially after the Fed minutes last week revealed that the Fed’s interruption of inflation is likely to be very different than what the market’s view is.
10- Year (TLT)
As I noted in my 10 predictions for 2021, I thought the 10-year could rise to around 1.5% in the first half of the year on the “illusion” of higher inflation rates. So far, I am sticking with that call, and with just 15 bps to go, I will have to think about whether that prediction was too low.
The next big level I am expecting on the 10-year will come at 1.51%.
But the big story last week was the big break high in real rates, also known as TIPS. The 10-year TIP saw its rate rise to -81 bps, while the 30-year TIP rose to +3 bps. Huge moves last week.
10-Year TIP (TIP)
It led to a rather big breakdown in the TIP ETF, which is the best way to easily follow the TIP market. For now, the TIP ETF found some support at $125.70, but I do not expect that to last, and I see the TIP ETF falling $124.30 in the weeks ahead.
S&P 500 (SPY)
As I noted in this week’s video for members of Reading The Markets, I still believe the S&P 500 index is likely heading back to support at roughly 3,780. (First, two-weeks are free to try out the service. T.W.A – Are The Bears Back?)
It could also mark the top of this leg higher in the index off of the March 2020 lows.
Tesla (TSLA)
Tesla is at a critical inflection level with the RSI on a big uptrend that dates back to the March lows. If the RSI uptrend breaks, it will indicate a major change in the trend and likely lower prices to follow. The stock has been hovering around support at $790, with the next major level at $730.
Uber (UBER)
I can’t understand why Uber has surged the way it has, and the count would seem to suggest the run-up higher is over, with the next level I am still looking for coming down at $54.75 and perhaps lower at $48.20.
Bank of America (BAC)
Bank of America is likely to continue to do well as long as rates stay at current levels or higher, resulting in the stock rising to around $35.75.
Alibaba (BABA)
Last we will look at Alibaba, which has struggled at resistance around $270. The RSI trend suggests lower prices lie ahead, with the stock’s potential to fall back to $256.
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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