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Stock Market Volatility May Soon Fade Away
I wrote in the midday commentary that for the morning rally to have any legs the S&P 500 need to rise above 2,610 and the XLY to rise above $99.40, and we got both going into the close, with the S&P 500 closing at 2,614, and the XLY closing at $99.68.
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The big breakout came in the final hour of the day, as sentiment changed when Bloomberg reported the White House isn’t taking steps to take action against Amazon, the market started ripping higher. The S&P 500 passed the crucial first test, rising above a downtrend and support which converged at 2,600. The next test comes at 2,633, but first, the S&P 500 will need to stay above 2,600.
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Technology
Unlike last week, I am not getting duped by the market again, until I get a confirmation breakout in the Technology ETF, XLK. That breakout has not occurred yet, and if it should come tomorrow a rise above $65.50 will be needed.
Facebook tested the lows of last week, held, and rebounded.
Alphabet shares continue to hold the $1,000 level. Did shares breakout again today, or do I have to redraw my line?
Tesla
Tesla reported good delivery numbers today and got pretty close to that guidance target, much better than the bears had been hoping for. But I think the critical piece is that company is still saying it will not need to raise any capital this year. Well see about that, part, but for now, the stock could move back into the $300’s.
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VIX
The VIX continues to move lower, and I’m beginning to think the reason why it hasn’t elevated to higher levels, for the most, the traders do not believe this volatility will last.
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[youtube-feed feed=7]S&P 500 put volume hasn’t been all that elevated, in fact, it appears relatively in line with the past year, except for the one spike in February.
SPX Put Volume data by YCharts
The put to call ratio in the S&P 500, isn’t even high or outside of the what appears to be normal levels over the past year.
SPX Put/Call Ratio data by YCharts
It would suggest that all this craziness something that may be coming to any relatively soon. Tomorrow will give us a good clue as to whether that is the case or not.
Good Luck
-Mike
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Tags: #sp500 #tech #technology #facebook #google #netflix #vix #tesla
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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.