Subscribe to receive this daily commentary directly in your email
Independent macro and options research, published every trading day — $85/mo or $750/yr
Subscribe →January 29, 2021
STOCKS – FB, AAPL, AMD, WMT
MACRO – SPY,
Mike’s Reading The Markets (RTM) Premium Content – FREE 2-WEEK TRIAL
- 4Q’20 Qrtly Investor Letter: MCM Thematic Growth Portfolio
- Update Board 1.29.21 – Uh-Oh Don’t Look Now
- Midday: The Narrative May Have Finally Changed
- Educational Material – The Danger Of Put Buying The Most Shorted
- Earnings Analysis – Tesla’s Lack Of Guidance May Weigh Short-Term
- Earnings Analysis: Microsoft May Become A Victim Of Its Own Success
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL
Stocks had a lousy day, with the S&P 500 plunging by around 2%. The index finished lower by over 3.3% for the week and was down more than 4% from the peak on January 26.
There are plenty of reasons why the market had a rough week; most will point to the action in the most shorted-names. Yes, I think that acted as the spark to start this break in momentum. Now that momentum is broken and earnings for many companies are pouring out, I think there is more going on. (Should be free to read – The Massive Short Squeeze Could Cripple The Stock Market)
I think for the first time, investors are thinking about these results and their conference calls, with the subtle hints of caution and using the short-squeeze headline as a reason to start selling.
For the second quarter in a row, Apple reported great results, but the stock can’t move higher. Facebook has seen the same. Both companies noted tough comps in the upcoming quarters. AMD has soft margins, and that stock hasn’t gone anywhere either. (Premium subscriber content on RTM – Midday: The Narrative May Have Finally Changed)
Amazon and Alphabet are in the same camp, and they get their turn to report results this week. If we get similar signs and subtle hints of tougher comps, I think things can get rough as the market deleverages while unloading some of the more overvalued stocks.
The short-squeeze has caused a tremendous amount of dislocation in the market, and I’m sure over the weekend, we will hear about some of the carnage.
S&P 500 (SPY)
The S&P 500 did manage to hold on to support around 3,700 today. But a break of that level on Monday quickly sets up for a move to 3,650.
Navigating The Market · By Michael Kramer Independent macro and options research, published every trading day. Daily written analysis covering gamma exposure, dealer flows, key levels, and the macro drivers moving markets. Includes full video access. Recent Subscriber Analysis
Apple (AAPL)
Apple has fallen a quick 9.5% from the January 25 high, which is a notable decline. Support at $130 must hold to avoid a drop back to $124. (Should be free to read – Apple’s Blockbuster Results Hurt By Lack Of Guidance)
Facebook (FB)
Facebook is also down a fast 9% from its January 26 highs, and I think heading back to $241. (Premium subscriber content on RTM – Earnings Analysis: Facebook Forecast More Challenging Second Half Of 2021)
The Market Chronicles · Video Membership The daily market commentary, delivered in video. Same daily market analysis, in video form — available to YouTube channel members only. Latest Videos
AMD (AMD)
AMD is down over 11% from its January 26 highs and fell below $87 for the first time since November 30. I have been saying for weeks the Xilinx deal would put a lid on this stock, and it has. Now the company had no margin expansion last quarter, despite blistering revenue growth? Something is off. The stock could be heading back to $75. (Premium subscriber content on RTM – Earnings Analysis: AMD’s Results Are Not Nearly As Strong As They Appear
Walmart (WMT)
Walmart finally broke support this week and is likely on its way back to $137.20.
Have a good one
-Mike
Mott Capital Management, LLC is a registered investment adviser. 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. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.
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.
Oil, Yields, and Volatility Set the Stage for Market Repricing
Mott Capital's Market Chronicles 7 hours ago