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Navigating The Market · By Michael Kramer
Independent macro and options research, published every trading day.
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August 9, 2020
Stocks – 700HK, AMZN, NFLX, TSLA
Macro – SPY, QQQ, DXY, SLV, GLD
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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN TSLA
Friday marked what could be the start of a significant shift in the market following the jobs report. The dollar index rallied sharply and appeared to have put in a double bottom. The index has found a significant level of support around 92.50, and should it rally beyond 94; it would likely confirm that double bottom pattern and set up a run to around 96. The RSI also hit very sold levels around 17.50 and is now beginning to show signs of a reversal of the trend.
If this is the case, it could market the unwind of the risk-on trade. (Premium RTM Content – The Unwind Of Risk-On Has Started)
Copper
Copper was smashed on Friday, falling by over 4% and breaking some crucial support around the $2.86 level. Additionally, the RSI suggests the metal still has further to fall, perhaps to around $2.70 from its current price of approximately $2.79.
Copper prices and the NASDAQ 100 have been highly correlated since the March lows, and either the two will now diverge, or copper is sending a horrible warnings sign for the NASDAQ 100.
Nasdaq 100 (QQQ)
One can also see how closely related the NASDAQ 100 and the dollar index have been over the past few months. Remember, a weak dollar acts as a tailwind to equity prices because it will help to boost revenue and corporate profits of multi-nationals, a strong dollar –well does the opposite.
Gold (GLD)
A strong dollar will also be a killer for the gold and silver trade as well, with the potential for gold to fall back to $1,925.
Silver (SLV)
And the potential for Silver to fall back to $22.50.
S&P 500 (SPY)
Don’t think it stops there because the S&P 500 has also seen a little boost from the short-dollar trade too.
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Two bearish patterns have formed in the S&P 500 one at the gap from February 24, and the second is a rising wedge, as I said on Friday to members if I had to pick a place and time for a pullback in the market it would be here and now. A drop below 3,260 on the S&P 500 could trigger a sell-off and gap fill in the index down to 2,860. (Premium RTM content – Big Levels To Watch – Midday)
Tencent (700 HK)
It isn’t just a rebounding dollar that could derail the risk-on trade, but Tencent in Hong Kong could be a weight too, as discussed in Friday’s morning call. The stock has now failed three times at 564HKD, and a break of 512 could send the shares sharply lower to around 434. (Premium RTM content – Forget The Jobs Data, Focus On Tencent)
Why do we care so much about Tencent? Well, look at the overlay of the chart with Amazon, and you will see why. A breakdown in Tencent could trigger a decline in the entire global technology stock trade. (RTM Premium Content- Don’t Blink – Morning Commentary Transcript)
Amazon (AMZN)
Amazon has struggled to advance despite strong quarterly results, and a break of that uptrend at $3,066 sends the stocks even lower to $2,685.
(Netflix (NFLX)
Netflix came very close to testing its uptrend on Friday, and a break of support at $495 gets that trend line broken, and the potential for a move back to $450.
Tesla (TSLA)
Tesla could be in trouble here too, already falling below its uptrend, and the potential for the stock to fall and fill a gap around $1,225.
Anyway, that’s all for this 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.
Dispersion Refuses To Roll While Brent's Neckline Comes Into Focus
Mott Capital's Market Chronicles May 29, 2026 2:59 PM