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#Stocks: $NVDA, $XLU, $EWU
#Macro: $SPX, $HG
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It was a lopsided trading session. Today, there were only 113 advancers versus 386 decliners. It’s a strange market, and I’m not really sure what to make of it. I’m not really sure there is much to take away from it because it continues to be a case of two markets: the indexes with Nvidia and the indexes without.
The Dow and the Russell 2000 were lower on the day, while the S&P 500 and NASDAQ were higher. The S&P 500 equal weight was lower by around 70 bps, which is a good amount, considering the S&P 500 was up around 40 bps on the day.
Meanwhile, it probably would have been a day more like the equal weight index had it not been for Nvidia, which rallied by 6.8% today and regained much of its losses from yesterday. The $125 level became resistance for the most part because that was level with a large amount of call gamma.
To this point, all the stock has done is to fill the gap from yesterday morning’s drop.
The PHLX Housing Index was down over 2% and is back to its support level of around 665. I like to watch the housing sector because sometimes it can act as a leading indicator for where the S&P 500 is heading. It was certainly the case in 2018, but it took a long time for the SPX to finally get the message.
At this point, we are waiting to see if the HGX will break support at 665. It would be beneficial if something could happen soon. If you want to talk about bad breath, all 19 stocks in the index were lower on the day.
Copper finally broke support today at $4.40, which probably means it could be back on its way to $4.21. This certainly won’t be good for mining stocks.
It probably won’t be good for the FTSE 100 or an ETF like the EWU because, for the most part, the UK indexes and ETFs seem to follow copper wherever they go these days.
It almost looks like the XLU has been following copper, too. I’m unsure if that is some AI trade—more AI chips, power, and copper, who knows? But that appears to have been the case more recently.
Whatever the case, I grow tired of talking about Nvidia and its influences on the market.
-Mike
Charts used with the permission of Bloomberg Finance L.P. 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.