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STOCKS – AAPL
MACRO – SPY, VIX
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- Stock Face Volatile End Of Day
- Expect A Lot Of Vol Today – Morning
- Webinar Replay Link For 6.18.20
- Stocks Face Headwinds Into End Of June- Midday
- Options Positioning Appears To Be Driving Volatility – Morning
- For Live Webinar On 6/18
- Trying To Break Free – Midday
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL
Stocks had an eventful day opening at the highs and closing near the lows. In all, the S&P 500 fell by 2.25% from peak to trough. The volatility shouldn’t have been a surprise, but the truth of the matter is that if today hadn’t been a quadruple witching day, I think the market would have fallen even more.
The futures continued moving lover after the closing falling to as low as 3055, a drop of nearly 2.8% from peak to trough.
In fact, the sell-off accelerated; it could even be an indication for how dealers need to be hedged as a result of the gamma roll-off today.
What triggered the sell-off was news that Apple would start closing some of its stores in a few states with rising COVID cases. The big question is what happens next, and will more companies begin to follow suit if cases continue to rise. Right now, this could be the biggest threat to the market, because so much is riding on a short live contraction and sharp recovery. The slightest concern or thought that the recovery might not go smoothly could be a significant speed bump for the market, and this is something that needs to be monitored closer. I’m not sure the market has priced in the risk of slower recovery.
But also notice that the S&P 500 has failed now three-time around the 3150 level, and struggled at that level all week. It could be a somewhat negative sign for what is to come next week.
Looking at from one more angle, using the SPY ETF, it gets a little bit worse because we can also see how the index not only failed in that region three times but, it three failed times at a downtrend that is now firmly in place.
The VIX spiked as a result of today, jumping to around 35.
I’m going to leave it there for a Friday night. Plenty to review over the weekend.
-Mike
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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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