Subscribe to receive this FREE daily commentary directly in your email
2/24/2022
STOCKS – NONE
MACRO – QQQ, SPY, VIX, TIP
- RTM: Tech Jumps As Real Yields Crater
- Thursday Morning Madness
- RTM: Critical Levels Of Support Approach
- RTM Exclusive: Intel – From Bad To Worse
- RTM: Stocks Sink As Conditions Tighten
- RTM Video: S&P 500 Heading May Be Heading, Sub 4k
- RTM: LIVE Q&A SESSION – Replay
- RTM: The Fed Is Pushing The Market To The Brink
Well, that was a strange day. The S&P 500 went straight down to 4,115 well below support at 4,180 I mentioned last night, and then went straight back up 4,295. Days like today are impossible to understand, and the only thing one can do is try and put the pieces together.
Here is my interpretation of what happened today; you can choose to agree or disagree; that’s your call. But if I am right, today’s rally isn’t going to last, just like the one on January 24 didn’t last.
For whatever reason, TIP rates fell dramatically in what looked like a gigantic flight to safety. It must have kicked off an algo program or something that resulted in the buying of technology and growth stock. That then led to a big short-covering rally as investors scrambled to unwind their put positions adding fuel to the fire.
It seems fairly easy to see what happened with the TIP ETF and the QQQ from the chart below. I went over this on two different occasions this morning with subscribers. (First two weeks are free to try – RTM: Tech Jumps As Real Yields Crater)
To give you a sense of how dramatic the decline in the TIP rate was, the 5-yr TIP dropped to -1.48% this morning from -95 basis points yesterday afternoon.
This led to a massive afternoon meltdown in the VIX as traders began to unwind their put positions. I did manage to dig through the options data, and most of the options there were trading for the SPY and Q were for tomorrow’s expiration date. That could mean that traders look to put hedges back on, heading into the weekend.
It was sort of surprising that the 10-year yield finished the day higher at 1.97%.
That’s really all for today, too much dislocation to get into anything else.
Mike
Mott Capital Management, LLC is a registered investment adviser in the State of New York. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Please remember that past performance may not be indicative of future results.
Subscribe to receive this FREE daily commentary directly in your email
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.
Volatile Week Ahead With Fed And September OPEX
Mott Capital's Market Chronicles September 12, 2025 2:14 PM