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3/7/22
STOCKS – QCOM, AMZN, LRCX
MACRO – SPY, QQQ,
- RTM Exclusive: Apple May Be Heading For A Big Drop
- RTM: The Recession Trade
- RTM: Live Event REPLAY
- RTM: Yield Curve Collapsing With Growth Implication
- RTM Exclusive: Volatility May Be Heading Much Higher
- RTM: Rates Explode Higher, But So Do Stocks
- RTM Yields Surge
The S&P 500 fell nearly 3% today to close at 4,200. Meanwhile, the Qs fell by 3.7% to close below $325. It is an exciting test for the indexes, whether or not they will be successful in taking out the lows from February 24.
The RSI on the S&P 500 is clearly moving lower and is yet to hit oversold levels and is currently at 38. Additionally, the advance-decline line made a lower low and seems to be leading the broader index lower; I suspect the S&P 500 will create a new Intraday low in the coming days and head to support at 4,050.
With oil at $122, the dollar index at 99.25, and Wheat trading at its highest prices since 2007, it seems as if the global economy is heading towards a massive slowdown or recession. Additionally, there has been no relief in the overnight funding markets, which means stress continues to build.
Also, the NASDAQ composite looks very weak, as the cumulative number of stocks making new highs minus new lows continues to make lower lows. I still think the signal this sends is that the market’s internals continues to deteriorate, and until this at least shows a sideways movement, the NASDAQ will continue to drop.
Financial Conditions
Meanwhile, financial conditions continue to tighten as the IEF/LQD ratio increases. It is now nearing the December 2018 levels.
Spreads
The pressures and fears this places on the market have resulted in the spread between the ten and 2-year rates to drop to 22 bps as recession fears rise.
Recession Rotation
Additionally, the full recession rotation was on full display today as the discretionary, housing, materials, and financial sectors were smashed. The discretionary ETF fell nearly 4.9% on the day, and the XLY dropped below support at $166. I went through this rotation and more in a 15-minute video today for members of my service, RTM. (Try RTM and get the first 2-weeks for FREE – RTM: The Recession Trade)
Amazon (AMZN)
Amazon fell by 5.6% on the day and has now given back all of those post-earnings gains, as I expected would happen. I am wondering now if it will make it all the way to $2450 or not.
Lam (LRCX)
Lam Research fell below support at $540, which makes support at $470 critical because the drop is huge after that.
Qualcomm (QCOM)
Qualcomm broke support at $152, and that gap at $140 is now in the process of getting filled.
That’s all for today.
-Mike
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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.
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