April 30, 2020

Stocks – MCD, FB, MSFT, TSLA

MACRO – SPY, 10Y, DAX

FUNNY LEVEL – HIGH

MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN MSFT AND TSLA

MIKE’S PREMIUM CONTENT ON READING THE MARKETS 

• On Close Imbalances How They Work
• Stocks Continue To Gain
• Stocks Jump On Gilead Hopes – Morning Commentary
• The Velocity Of MZM May Drive Rates Even Lower

Stocks are rising once again on April 30, with the S&P 500 pointing to an increase of 18 basis points on the SPY ETF. Of course, today is initial claims Thursday, and that means the market is bound to rally once those numbers hit the tape. Of course, I say that with a great deal of sarcasm, because the number of people that have lost their jobs has been outright scary. Being someone that works for themselves, I know how frightening and how scary it feels not to have job security. After all, I am only useful if I can get things right in the market, and people choose to read me. So I get it.  Only as good as your last trade, oh, the life of a trader.

But the market is viewing the significant jobless losses at this point, not as a negative, but as a positive. The bigger the losses, the more likely more stimulus will come, and the worst of the virus is behind us. But is it?  Of course, this may only last for some time, as bad news is always bad news. 

S&P 500 (SPY)

Anyway, the market just seems to be doing its thing and continuing to rise. There are more gaps to fill, so as long as those gaps exist, than it seems likely that the market can continue to rise. But after this level of $293 on the SPY, the next level would come at $300. If you are a bull, then the good news is the RSI is rising once again, and that means that the market is once again picking up so momentum. 

What I do find interesting is how the index continues to get rejected on the bottom side of the March low uptrend while forming a newer, tighter uptrend—just wondering if anyone read the Gilead data? You do know a p-value of greater than 0.05 means that the data isn’t statistically significant? Right? Anyway, thought I’d mention that.  

10-Year

Meanwhile, the 10-year continues to scare the crap out of me. It seems destined to break support at 55 basis points, and I fear what happens to the equity market once that level on the 10-year breaks. How do you think equity prices respond to a 0-25 basis point range on the 10-year?

Germany (DAX)

The big question also on my mind is what is Germany signaling. The  DAX broke that uptrend off the March lows too and is now retesting that uptrend. Does that mean, the DAX is getting ready to turn lower soon?  Shh… don’t tell investors that the number of coronavirus cases are on the rise in Germany after easing restrictions.

Facebook (FB)

Anyway, I still can’t understand Facebook’s big jump after hours. I mean, usually, if a company pulled guidance and said its profit margins would get smaller, the stock would likely go down. Not Facebook, I can’t understand this stock anymore. It makes absolutely no sense to me. Anyway, $212 is resistance, and I wouldn’t be surprised if this “rally” doesn’t last. 

Microsoft (MSFT)

Microsoft is rising after it reported strong first quarter results and gave guidance that was slightly weaker than expected; at least they gave guidance and noted spending in the fourth quarter would rise.  Look, I own this stock, and I love it for the long-term, but that doesn’t mean I can’t think it is overvalued a bit here. I still think the stock trades down to $162.  I bought it around $106, so $175 or $162, I don’t care. 

Tesla (TSLA)

Tesla is rising today, and is above that $850 level I was looking for. Do you think Elon Musk is getting antsy? He wants Fremont opened yesterday. Anyway, $902 is the next level to watch. 

McDonald’s (MCD)

Yet, another stock I never understood. McDonald’s is falling a little bit and could be falling out of that rising wedge pattern. $178.50 is the next level of support. 

Anyway, that’s all for now. Amazon and Apple tonight. Good Luck. Results may or may not matter. 

-Mike

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