Subscribe to receive this FREE daily commentary directly in your email
November 3, 2021
Stocks – AMZN, ROKU, DIS
Macro – SPYtock
Mike’s Reading The Markets (RTM) Premium Content – $45/MONTH OR $400/YEAR
- RTM Exclusive: The Trade Desk May Plunge Following Results
- RTM – Pre Fed Thoughts
- RTM – RISK: From On To Off
- RTM: Unusual Patterns In Volality Indexes
- RTM: Third Quarter Earnings Update
- RTM Tactical Update: Markets May Be Losing Confidence In Central Banks’ Ability Control Inflation
- Live Event 10.29.21
Today, stocks were over the moon that the Fed tapered but didn’t talk about a rate tightening cycle. I didn’t even see anything new in this announcement or press conference. It was kind of boring, to be honest.
The Fed futures were undoubtedly not moved by today’s statement. Yields rose across the curve, with the longer-dated yields rising the most, steepening the curve, while the dollar weakened.
My view hasn’t changed as a result of this meeting. I still think we will see the yield curve flatten and the dollar rise, thus tightening financial conditions over time, which will act as a headwind to stocks.
The big thing, though, is the stalling growth that appears to be occurring globally and most notably in China. Iron-ore prices have plunged, and now copper prices are falling too. The Baltic dry index fell by more than 9% today and is below 3,000. Meanwhile, oil prices have stalled and now heading lower as supplies are building. At some point, this should click with the market, that the Fed is tapering into a global growth slowdown.
S&P 500 (SPY)
Currently, the S&P 500 is facing the October 2020 trend line, which broke back at the beginning of September. If the index can get through that resistance which is currently at 4,660, then there is a good chance we move up to the 4,750 to 4,800. If the index cannot get beyond 4,660, then I would think this rally is over, as a failure would signify a retest of the break in the uptrend. It would likely result in the September/October lows being taken out. The RSI on the S&P 500 is now at 73.50, which is high and tells us the market is overbought.
Roku (ROKU)
Roku is plunging tonight, nearly 10%, after guiding revenue for the next quarter below expectations. Oh well. A break of $287 will send the shares on their way lower to $228. Probably not a great read-through for another overvalued/overhyped stock, The Trade Desk.
Amazon (AMZN)
Amazon was up today, and it looks like it will try to refill the gap around $3440. I still think this stock is dead money for the foreseeable future.
Disney (DIS)
Disney will be reporting results soon, and the chart doesn’t look the strongest, with a descending triangle pattern forming and a giant gap to fill at $154.
Have a good one
Mike
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 results.
Subscribe to receive this FREE daily commentary directly in your email
Charts used with the permission of Bloomberg Finance L.P. 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.
Bond Yields Are Nearing Escape Velocity
Mott Capital's Market Chronicles 7 hours ago