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September 11, 2021
STOCKS – AAPL, UBER, MRK, SQ, CRM, ROKU
MACRO – SPY, VIX
Mike’s Reading The Markets (RTM) Premium Content – $45/MONTH OR $400/YEAR
- RTM Tactical Update: Earnings Estimates For The S&P 500 May Be Too High
- The Replay Of 9.10.21 Live Q&A Session
- RTM Exclusive – Bearish Bets Piling Up On Micron
- The Fed May Be Forced To Taper Soon
- RTM Exclusive – Micron’s Stock Is About To See A Whole Lot Of Turbulence
- RTM Exclusive: The ARKK ETF May Sink Even Lower
- RTM – Earnings Downgrades Should Be Next
- RTM Exclusive: Has Uber Finally Bottomed?
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL
VIX (VIX)
Stocks sold off on Friday afternoon, finishing the week lower by over 1%. The sell-off came late in the day after the VIX ran up. Typically on Friday, we have seen the VIX meltdown into the close, helping to give the S&P 500 a boost. That was absent this week, and as a result, the VIX is very close to breaking a serious downtrend. This will need to be watched closely on Monda; should the VIX continue higher, it would indicate increased put buying is taking place in the market, and worries of a sell-off are building.
S&P 500 (SPY)
This is a pretty important spot we are currently in, with the S&P 500 sitting right on the uptrend that started last October. So a gap lower on Monday below 4,450 and the trend line would be terrible news for the S&P 500 and would likely coincide with a breakout in the VIX index. That would put added pressure on the lower Bollinger band to hold at 4,410.
But there is a problem with the Bollinger band holding at 4,410. A move below 4,440 from a gamma perspective will trigger a wave of selling pressure, with the first minor level of support coming around 4,250, which I noted this week in a write-up for SpotGamma.
So yes, this sell-off could really be the one that turns into more than just a dip; to this point, this may be the strongest case for something greater than a 5% drop that we have seen in a while. Don’t forget the RSI and where it is positioned; it is currently just above a support region at 42.
Additionally, we continue to see a lot of weakness in these economically sensitive parts of the equity market. It does make sense to some degree because now we have started to see clear signs that the economy is moderating very quickly, which is why sectors like housing, transports, and commodities have been trending lower. In fact, if the next trend plays out as I expect it to, it means earnings estimates will start turning lower, which pulls this current cycle incredibly close to that of 2018. I talked about that in this week’s Premium Tactical Update – (Premium commentary – Earnings Estimates For The S&P 500 May Be Too High, And May Results In A Sell-Off Like 2018 – 9.11.21)
Apple (AAPL)
Apple fell hard on Friday following the ruling on its battle with Epic. At this point, there is no way to know what the potential impact of this will be. I still tend to think it will still be easier to pay for things with apple pay instead of redirecting to another website. Look, at the end of the day, this stock is not cheap, especially for the growth rate you will get going forward. So I still think the stock is ahead of itself, and we still see a pullback to that $130 region. The RSI is also flashing a bearish divergence with the lower high versus the stock’s higher high.
Square (SQ)
Yep, Square’s been falling again and is really close to support at $245. A break at that price probably pushes Square lower to $229. The RSI is still falling and not yet near oversold levels. I’m curious how all these buy now/pay later thingy will work out in the end. I haven’t made up my mind yet.
Salesforce (CRM)
Well, Salesforce never really made it past $267; I never thought it would. The stock broke support at $260, with $240 most likely the next stop.
Merck (MRK)
Merck managed to hold on to $73 on Friday. There is something that resembles a falling wedge on the 5-minute chart, and perhaps that means the leg lower is finished, and the stock rebounds back up to $75.50.
Uber (UBER)
Poor Uber doesn’t want to go higher. I’m not giving out hope yet, the trends still look to be enacted, and I still think it can move higher to $45. (RTM Exclusive: Has Uber Finally Bottomed?)
Ford (F)
Ford still looks terrible. The stock needs to break down already and move to $12.15; just get it over with.
Roku (ROKU)
The big question is if Roku broke support at $335. It sure looks like it, but it is too close to tell. There is an excellent argument to be made, though, for the stock going to $295 and then lower. We can save that for another day. (RTM Exclusive: The ARKK ETF May Sink Even Lower)
Have a good one
-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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