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Stock Market Volatility May Soon Fade Away

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.

S&P 500

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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.

technology

Facebook tested the lows of last week, held, and rebounded.

facebook

Alphabet shares continue to hold the $1,000 level. Did shares breakout again today, or do I have to redraw my line?

google

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.

tesla

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.

vix

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 Chart

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 Chart

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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Mott Capital Management, LLC is a registered investment adviser. 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. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future.

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Tags: #sp500 #tech #technology #facebook #google #netflix #vix #tesla