This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.
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STOCKS – AAPL, NVDA,
MACRO – SPY, QQQ, SPYG, DIA
- RTM: The Next Leg Lower May Have Begun [DAILY UPDATE]
- RTM Tactical Update: Your Guide To This Week’s FOMC Meeting
- RTM: Fed May Be One And Done [Daily Update]
- RTM: VISA May Be Heading Sharply Lower [OPTIONS IDEA]
- RTM: Options And Bonds Were Right [DAILY UPDATE]
- Who’s Smarter? Bonds And Options Or Equities [Daily Update]
- RTM: Market Liquidity Is Thin
- RTM Exclusive: Apple May Be Heading For A Big Drop
- RTM: The Recession Trade
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN APPLE
Stocks finished the day lower, with the S&P 500 dropping by almost 75 bps, with the NASDAQ QQQ ETF falling by around 1.9%. It could have been much worse for the S&P 500 had it not been for the XLF ETF climbing by 1.25%.
S&P 500 ETF (SPY)
Today that triangle in the SPY broke, and if we get a move lower tomorrow, it likely results in the start of the next leg lower for the markets, which could amount to a drop of around another 7%, and talked about this in more detail in this weekend’s YouTube video.
Meanwhile, the QQQ ETF closed just above support at $317. Once that level breaks, as discussed in the video, nothing is holding the ETF from falling to around $300.
At this point, the yield curve between the 3-Yr and the 10-yr is entirely flat. This is a pretty good indication of how the markets are currently thinking about the Fed and its rate hike cycle. It would indicate that the Fed gets to around 2% and is done.
It makes a huge risk for the market going into Wednesday. If the dot plots for 2023 show a rate above 2%, the bond market could be in for a big surprise.
The Dow had a decent day today, with the help of the financial stocks. There is what appears to be a bearish pattern in the Dow, and once the average breaks support at 32,800, it should result in the start of the next leg down for the Dow.
S&P 500 Growth (SPYG)
Something similar is currently present in the S&P 500 Growth ETF (SPYG). Once it breaks $59, the growth sector is likely to see the start of its next leg lower.
Nvidia has a very similar look to both the Dow and the SPYG, with support at $207.
Apple may be already telling us the break is coming. The stock broke down today, falling below support at $155. If $149 goes, the next level is $140.
Let’s see what tomorrow brings.
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.