June 3, 2020

Stocks – SHOP, MU, ROKU

Macro – SPY, QQQ, TLT, DOLLAR

An interview I did with Seeking Alpha Yesterday

MIKE’S READING THE MARKET PREMIUM CONTENT $35/MONTH OR $300/YR–

• Tech Most Overvalued To Small Caps, Since, Well, 2000 – Midday
• Betting Micron Falls After Results
• Stocks Set To Rise, But Is The End Near? – Morning
• The Long-Term Growth Outlook For Stocks May Take A Huge Hit
• DEALERS HOLDING KEY LEVELS
• 3,100 Or Bust Is Closing In
• Drifting Higher Midday 6.1.20

There are just some things that make me wonder some times. Take the Nasdaq 100 QQQ’s they topped out February 19 at a random price of $237.47. Today the intraday high… you guessed it $237.47.

Even better is that the market is near its all-time high, and things seem fine and dandy, perhaps we can start talking about the Fed paring its balance sheet? Why does the Fed need to keep buying bonds, now that everything is working well? Shouldn’t we start trimming the balance sheet, so we have ammunition for the next crisis? Wasn’t that the logic the last time around?

Ok, I’m joking around about paring the balance sheet. But seriously, ask yourself how much longer the Fed will keep pumping money into the system? You better start asking yourself that question, that I am serious about.

Anyway, it is interesting how the market has traded during the last few days. There is a massive rotation still taking place, how much longer it will last, I’m not sure. Yields went up today, and I’m confused by all the data. The Federal Reserve data points all suggested the economy was in a place equal to or worse than the recession of 2008 to 2009. But today’s ISM report indicates the economy is quite beautiful; in fact, the reading corresponds to just a 1.1% decline in real GDP on an annualized basis. Weird. The Atlanta Fed suggests that second-quarter GDP is contracting at a rate of 52%. That’s a big difference.

Even more bizarre is that ADP report, which showed job losses of about 2.7 million, way off estimates for about 8.6 million. I’m not sure what happened there, well I have an idea, but I’m not getting into it.

10-Year

10-Year rates moved up 78 basis points and backed off. Will the 10-year break out, it could, but I think the deciding factor maybe Friday.

Dollar

The dollar weakened, despite rising yields. Are increasing yields and the falling dollar telling a tale of worries over the deficit? Too soon to tell, something to pay attention to, it may quickly become a topic.

Roku (ROKU)

Roku fell today, it probably as further to fall. It seems some else can make a smartTV, and that Roku isn’t the only game in town. Geez, shocker…Anyway, the RSI points lower, and that is probably the direction the stock will go maybe even to $90.

Micron (MU)

Micron rebounded today, but I saw some bearish betting today, so I’m not sure if the rally will last. Premium content – Betting Micron Falls After Results

Shopify (SHOP)

Shopify, is it finally starting to see a trend change? The company has an $81 billion market cap and is expected to have revenue of about $4.1 billion. Sorry, I should have said in 2022, a mere 20 times sales in 2022. Trading with a PE ratio of 521 for 2022. Where are all the bearish articles on this stock? I can’t remember Tesla ever trading with multiples like this. Hey don’t get me wrong, I think Shopify has an exciting business, it is just that a lot of things have to go right for this to happen. Anyway, the RSI is trending firmly lower now and appears to be picking up steam, $680 is the first level to watch for.

Anyway, I’m out energy and witty comments. That is all

-Mike

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