MARCH 2, 2020

STOCKS: AAPL, MSFT, NVDA, BA, ROKU

MACRO: SPY, YIELDS

MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL, AND MSFT

Join me and the members of Reading The Markets, the premium version to this market commentary, on March 5 at 9 PM ET for an exclusive webinar. It is live, and I will be reviewing as much I can about the current state of the market, and will have a live Q&A session. But you have to sign-up to get on the webcast. Premium content – The Revenge Of The Bears Webinar March 5, 9 PM ET

Stocks snapped back on March 2 with the S&P 500 rising by around 4.6% to close at 3,090. The rebound was stunning with the bulk of the gains coming in the last hour of trading. The move higher reminded me a lot of that December 26, 2018 rally we saw.

At this point, we are approaching this region of resistance between 3,090 and 3,110.

The index gapped higher and quickly filled the gap, grinding higher all day. It did pause some in the middle of the day, but once we got the “coast is clear” sign between 3:20 and 3:30, the market just rocketed higher. Again, I go through all this stuff in the midday update. Premium content –  Stocks Are Rebounding – Midday 3.2.20

The pattern of today’s rally is somewhat similar, if not nearly identical to the pattern we saw on December 26, 2018.

So if the pattern continues, then we could very well gap lower and trade down tomorrow. Regardless, of the pattern, it seems natural to me that we trade lower tomorrow, because the index managed to close right at resistance today, and after such a big move at the end of the day Friday and today, it seems only natural to retrace some of the recent gains.

The most likely scenario would be for the S&P 500 to trade down to around 3,040 to 3,045.

There will be a conference call tomorrow at 7 AM with the G7 nations. I’m not sure how this will play into trading at this point as I have no details, but part of the market’s sudden surge is most likely in response to these expectations being built-in. 

It wasn’t just the index that closed right at resistance; you will see that pattern emerges in the stocks I run through.

In a video today for paying members, I walk through my expectations for the market to move sideways now in a pretty wide range. I am hopeful this will help to build a longer-term base. Premium content – Stocks Are Rebounding, What To Look For Next?

Yields

One reason why the market rose sharply at the day’s end was that the 10-Year yield finally broke free of its trading channel, and that helped the yield to increase to around 1.18%. 

The 10-Year yield is so oversold, that the RSI hasn’t been been this low since Oct ’98. Afterward, the 10-year yield rose, from get this, 4.29% to 6.77%

Apple (AAPL) 

Apple was able to rise back to $300; this is a pretty firm level of resistance; we should be mindful of that level. I would hope that support at $292 would hold.

Microsoft (MSFT)

I readjusted Microsoft’s resistance level to around $173.50. Again, notice it stopped there.

Roku (ROKU) 

I got a couple of requests from paying members today on Roku. To some degree, I’m surprised to see that the stock has held up so well. But on the other hand, the stock didn’t participate in today’s rally. That can’t be a good, thing. The trend is still lower, and $116-117 is acting as resistance and $100 as support.

Nvidia (NVDA) 

Nvidia got to resistance today around $275 and stopped. I don’t think the stock fills the gap yet; maybe it first retraces to around $265.

Boeing (BA)

Boeing fell just about to support at $267, but the big question now is if it can back over $300.

Anyway, rest up, you are going to need it! I’m sure I’ll be up bright and early at 4:30 am. 😛

-Mike