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STOCKS – RBLX, PYPL, BA, DOCU
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Stocks had a solid finish to the week, with the S&P 500 rising by around 3% on Friday. There is probably some more room for the market to increase to start the week after it cleared resistance and filled a gap on Friday. I had been waiting to see what happened with the index at 3,815, but the market blew right through that level on Friday and never even gave me a chance to look.
At this point, the S&P 500 appears to be targeting that gap around 4,020, and that may very well we are going to start this week. After that gap is filled, I think the market starts turning lower again after a brief period of consolidation.
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The option cycle is working out nicely, and typically after the rally completes, the market tends to stall and consolidate for a few days. I wouldn’t be surprised if that happened again through the July 4th holiday weekend. That would take us up to the FOMC minutes’ cycle, which should be released around July 6.
Additionally, reserve balances fell to a new low this week, implying that the S&P 500 is likely to make a new low over the next 2 to 3 weeks.
The VVIX is getting towards the lower end of its trading range, suggesting it is getting pretty cheap again to be buying protection since implied volatility is getting reasonably low. The VVIX has been steadily trending lower since peaking in early 2022. We will have to see if the VVIX bottoms this time around 85.
I think rates may be set up to take their next move higher. The 10-Yr had a massive move upward, and to this point, it appears the move down may have only been a retracement, falling to the 61.8% retracement level at 3%.
The TIP would agree that rates are going higher as it quickly approaches its uptrend and is getting close to breaking that trend. It would imply that the TIP ETF revisits its lows in the not-to-distance future and probably makes new ones.
Copper prices have been collapsing, which is an influential gauge for the global economy’s health, and bears watching during the week. With the price of copper hovering around a critical support level, a further breakdown could indicate a severe amount of global slowing.
Roblox continues to look strong and rebounding nicely, as momentum in the RSI remains very bullish. The stock also crossed above resistance at $35.50 for the first time since mid-April. The next significant technical resistance level doesn’t come until $45ish.
Boeing is also seeing a lot of bullish momentum, with an RSI that has broken a downtrend. The stock is now below a significant downtrend, with an opportunity for it to climb back to $155.
Momentum in PayPal continues to grow more positive, with an RSI that is very close to breaking out and a stock approaching the top of the falling wedge. It just needs to clear $83 at this point for a much larger rally.
DocuSign also appears to be trying to make a turn for the better, with an RSI in a clear uptrend, pointing towards higher momentum, and the potential to fill a gap around $87.
Have a good Sunday.
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.