Stock Have Volatile Trading Session On May 10 Ahead Of Tomorrow's CPI

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5/10/22

STOCKS – CMG, RBLX

MACRO – SPY, TIP, QQQ

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Michael Kramer and the clients of Mott Capital own RBLX

The S&P 500 up just 25 bps. The index traded as high as 4,070 today, which was a resistance level that held all day, and traded as low as 3,955. It felt like a like consolidation ahead of the CPI report tomorrow. I think there is a good chance we retrace to that 3,955 level at some point tomorrow, liquidity has been thin the sharp vertical Intraday rise appears to an unstable pattern. However, an increase above 4,070 will likely lead to a gap fill at 4,160,I think.

Real Yields (TIP)

What did make a new low was the TIP ETF dropping to $117.19. Real yields continue to rise and typically when the TIP ETF is making new lows, the QQQ ETF isn’t too far behind.

Chipotle (CMG)

The chart on Chipotle looks extremely weak, with the shares sitting above support around $1,290. But once support at $1,290 fades away, there is nothing until the $1,180’s, and the RSI has a very negative trend bias. So I think a break of that support at $1,290 would be a warning sign of lower prices.

Roblox (RBLX)

Roblox reported results, and they missed estimates on earnings and barely missed on bookings, while daily active users came in-line. At least at first glance, they didn’t seem disastrous. Given how much the stock has fallen, one would have thought that DAU’s would have been cut in half. The call tomorrow should clarify a few things, I hope. The chart doesn’t look horrible, actually, with a bullish divergence on the RSI versus the falling price. If the stock can hold these lows, that is a big positive, at least I hope.

Anyway, I will keep it short today with the CPI report tomorrow, we will have to see how things respond.

-Mike

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