February 22, 2021
STOCKS – TSLA, AMD, BABA, SNOW, ROKU
MACRO – SPY, QQQ
- Midday Day: Stocks May Not Be Able to Handle What Comes Next
- Morning Note: Yields Continue To Pressure Stocks
- T.W.A – Are The Bears Back?
- NVIDIA: Covered Call Strategy Ahead Of Results
- 2.19.21 Chatboard And Live Stream Replay
- Midday – Rates Are Breaking Out
- MORNING NOTE: BUCKLE UP, THINGS MAY GET MORE VOLATILE AFTER TODAY
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN TESLA
Stocks fell on February 22, with the technology sector hit the hardest and the Qs falling by 2.6%, while the S&P 500 fell by around 75 bps. Rates continue to be the name of the game, with the 10-year yield trading at 1.37%, up from 1.34% on Friday. Rates likely aren’t finished rising either.
S&P 500 (SPY)
The S&P 500 played a great game of filling the game this morning, trapping plenty of people with the end-of-day sell-off. The index rose right back to 3,902 and managed to fall the rest of the day to close at 3,877.
Still, I think at least over the short-term, a drop back to 3,780 appears to be where the index will continue to grind towards.
NASDAQ 100 (QQQ)
The Qs finished the day below the November uptrend and below support at $323.50. Tomorrow will be a big day for the Qs; it will tell us a lot about what happens next.
Growth Vs. Value
We have already seen the mean reversion in the QQQ to the IWM. As small caps rocketed higher in recent weeks, bringing the ratio back to pre-pandemic levels.
The big question is if there will be a reversion to the mean in Growth vs. Value. That will be a harrowing experience if it continues at today’s pace.
Tesla fell rather hard today, blowing right through that $730 level to close at $716. The next level I am looking for is $695, but that may not hold either. Please do not discount the chance of it falling all the way back to $503. It sounds crazy, but the RSI uptrend off the March low is broken, and that likely means it has much further to fall before becoming oversold.
Roku got a big price target boost today from Needham to $550 from $400. Still, the stock finished lower by 6.5%. The stock has an uptrend at approximately $425, but the bigger problem, other than its insane valuation, is that the RSI is very close to breaking down. If that is the case, and $425 doesn’t find a bounce, then the stock likely has much further to fall, like into the $200’s
Snow closed right on support at $270. This is a massive level for Snow, with a breakdown likely to send the shares all the way back to $234.
Alibaba finally closed below the $256 level, and now that finally sets up that drop to $243 I had been looking for.
AMD is breaking down now, and there is no reason it shouldn’t with that giant deal for Xilinx weighing over it. I still can’t believe Xilinix agreed to an all-stock deal. AMD closed below $87, which gives its best shot to drop to $75 we have seen in some time.
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