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MAY 20, 2020
STOCKS – FB, PYPL, NVDA
MACRO – SPY, QQQ
Mike’s Premium Content –
- Stocks Rise, But With No Confirmation And Signs Of Fatigue
- I’m Sorry, I Still Can’t Be Bullish – Midday
- Bets Mounting Gilead Drops
- Still Waiting – Morning Commentary
So it was another day of stocks rising with the S&P 500 climbing by 1.7% to finish at 2,971. The market for today increased despite any specific coronavirus headlines, which was certainly nice. I can’t say that much changed from a technical standpoint, nor a fundamental perspective.
Today the S&P 500 increased to the highest level since the beginning of March. For some time, we were going no were fast, but today was the first day that we could say that stocks broke out of there prior trading range. The rising wedge pattern I have been following is still present, but fears of a double top or triple top can now be pushed to the side.
The RSI today did not make a new high, nor did the advance-decline line. Ideally, we want to see these two indicators climbing along with the index, but not everything can always be perfect. Volume levels weren’t all that great either.
Nasdaq 100 ETF (QQQ)
The Qs are now at the top of their trading range, and at least the last three times this happened, the Qs ended up dropping by about 5% to the lower end of the range. Perhaps this time will not be different?
VIX
The VIX still has not made a new recent low, trading around 28 today. As long as the VIX continues to decline, it can help to drag the S&P 500 higher. As volatility comes out of the market and put values decline, it forces dealers to get long more futures, helping to push the market into positive gamma territory, which means lower volatility and higher prices.
Facebook (FB)
Facebook made me look pretty stupid this week. It wasn’t so much that my chart was off, more so that the company launched its new Shops unit, which helped to fuel the rally. Yes, Facebook has an RSI that is over 70, but we can see the trend is higher here, and volume was tremendous today. So I guess it continues to push higher towards $238.
Nvidia (NVDA)
Nvidia will report tomorrow, and I have no idea what the company is going to have to say to keep this marching higher. The stock has doubled since the middle of March, its valuation is the highest it has been in years on a P/E basis. In this case, the chart tells you nothing, and the options market has been silent. So I have no clue.
PayPal (PYPL)
PayPal has been super hot, but the volume has been falling and the RSI is starting to diverge, and well, doesn’t it have to fall at some point? $130 would seem like the logical spot.
Anyway, that will be all.
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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