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May 13, 2021
STOCKS – AMD, BABA, JD
MACRO – SPY, TIP
Mike’s Reading The Markets (RTM) Premium Content – FREE 2-WEEK TRIAL
- RTM Morning – Stocks Set To Bounce, Will It Hold?
- RTM Morning – Stocks Sink As Inflation Soars
- RTM Morning: More Pain Comes On 5.11.21
- RTM Video – Capitulation?
- RTM MORNING – Reflation Trade May Be Running Out Of Room
- Measuring The Life Cycle Of The Reflation Trade
- MORNING NOTE- TOO MUCH OF A GOOD THING
- Is The Reflation Trade Ready To Deflation?
- RTM MORNING: WE ARE THIS CLOSE TO THE CLIFFS END
Stocks finished the day higher, despite the hotter than expected producer price index. So stocks plunged yesterday on hotter CPI, rebound today on hotter PPI, make any sense? Well, no. Really, this seemed to be a bit of bounce more than anything; perhaps it will carry through to tomorrow, perhaps not.
The VIX fell sharply today, and that likely means that there were plenty of people closing out their put positions, and that gave the S&P 500 the energy it needed to climb. There really is no other explanation for today’s action.
S&P 500 (SPY)
It looks almost like there is a pennant pattern that has formed on the hourly chart. That is usually a continuation pattern, and it would seem to suggest lower prices for tomorrow. For now, the March 2020 uptrend acted as strong resistance on two occasions today. We could view this as a re-test of the breakdown for the moment. Tomorrow will likely determine a lot. We do get retail sales, and I think if retail sales disappoint, the immediate thought might mean the Fed can’t tapper. But really, it strengthens the case of slowing/stagnate growth with rising prices. I can’t image how a stagflation type of scenario is good for stocks, but if the bulls are creative, they could figure something out, I’m sure.
TIPS (TIP)
Quietly this afternoon, the New York Fed noted it would be shifting how it would be buying bonds ever so slightly. Most notably, they were going to be increasing the purchases on the longer end of the curve and reducing TIPS. We will see if it gets the TIP market moving higher. The TIP ETF did move lower around the time of the release.
Alibaba (BABA)
Alibaba didn’t have a good day after reporting results. The stock looks like it is getting oversold here, at least in the short term. It should find some support around $198.
JD.com (JD)
JD.com looks really weak, too, and I don’t think it has bottomed yet, but getting closer. I think $60 is likely the next stop.
AMD (AMD)
AMD still has another leg lower to take; I still say it is going to $62.
-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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