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3/27/22
STOCKS – ADBE, AMZN, FCX, ACAD
MACRO – SPY, QQQ, LQD, HYG, TIP
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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN ACAD
S&P 500 (SPY)
It will be a critical week for stocks after two weeks of gains. The S&P 500 finished Friday in an exciting spot and at more than one inflection point. It could mark the start of a much bigger run higher to the mid-4600s or the beginning of the next leg down, which will likely result in a new low.
This week, the S&P 500 traveled right back to the bottom of the rising megaphone pattern that started in the spring of 2021, which also connects with a horizontal line to the September highs. It looks like a retest of significant resistance.
That closing price on the S&P 500 also hits the 61.8% retracement level from the January peak to the February Intraday low. That evidence is reason enough to consider that the rallies’ highs may be in, and a reversal is here.
NASDAQ (QQQ)
It is also worth noting that the NASDAQ Composite flashed a hanging man on Friday, which can be a bearish reversal candle.
High Yield ETF (HYG)
But more critically, a bond proxy like the HYG, which typically trades highly correlated to the S&P 500, started to head lower again. That ETF finished the week down almost 1%.
Corporate Bonds (LQD)
The LQD ETF finished the week down more than 2%.
Real Rates (TIP)
The TIP ETF also fell by 1.4% this week. When this ETF falls, it is indicative of real rates rising. So it’s no wonder why the QQQ ETF has followed the TIP ETF so closely over the past year. The recent rally in the QQQ could have the NASDAQ playing catch up to falling real yields. But now that real yields are again starting to rise, that likely means the NASDAQ will need to reverse lower.
Amazon (AMZN)
Amazon couldn’t push beyond that $3,300 level I mentioned last week. On top of that, the long-term trend in the RSI is pretty negative. If Amazon turned lower at this point, it should not come as a surprise.
Acadia (ACAD)
It would be something if Acadia could clear resistance $27 and push back to $30. I am hopeful this stock has finally turned the corner, and I think it is a big positive that the FDA is finally giving Nuplazid its chance in front of an Adcom panel for Alzheimer’s disease psychosis. It feels like a never-ending saga with Acadia, and maybe I’m getting my hopes up, but the chart is starting to look positive.
Freeport (FCX)
Higher copper prices could help keep Freeport moving higher, as the shares have the potential to climb back to $56.85, a price not seen since before the financial crisis.
Adobe (ADBE)
Meanwhile, Adobe flirts with support at $420; it would be great if this stock could flush lower already. It would probably set up a long-term buying opportunity if it can get back to or below that February 2020 level. That valuation would be right at or near its historical trends.
Best of luck this week.
-Mike
Mott Capital Management, LLC is a registered investment adviser in the State of New York. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Please remember that past performance may not be indicative of future results.
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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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