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1/6/2022
STOCKS – NFLX, NXPI
MACRO – SPY, DIA, TIPS
- Live Q&A Session Friday, January 7 @ 12 PM ET
- RTM: A Pause In The Middle Of The Storm
- RTM- The Fed Is Going To Be Much More Aggressive Then The Markets Thought
- RTM: Beware Of Quantitative Tightening
- RTM: Don’t Rush Into The Reflation Trap Yet
- RTM: Evidence Of Further Economic Slowing
- RTM- Topping Patterns – Video
- RTM First Look: Adobe’s Shares May Have Significant Downside Risk
Stocks did a bunch of nothing today, with the S&P 500 finishing the day down ten bps, while the Qs finished lower by seven bps. It felt like a pause day for the equity market in what is otherwise a downtrend.
Tomorrow we will get the BLS Job report, and it obviously carries a lot of weight. The estimate is for 400,000 jobs added in December. The BLS job report has been trailing the ADP report, and over time these two tend to move together. The BLS report appears to be trailing the ADP, and one could argue that the BLS is due for a big surprise to the upside tomorrow.
Rates
Yields continue to surge with the 2-yr jumping to 88 basis points, and real yields, such as the 5-yr TIP, making a massive move, jumping to -1.34% from around -1.6% yesterday. That move in real yields probably isn’t over just yet, especially if the jobs data tomorrow comes in stronger than expected.
When looking at the S&P 500 on the intraday chart, we can see more closely the consolidation taking place throughout the trading session, with support at 4,670. There was a very well-defined triangle pattern that broke in the final 30 minutes of the day. A strong job report that sends yields even higher could send the S&P 500 down by another 2% to around 4,570, filling the gap from December 21.
Dow (DIA)
The Dow is just a big mess, with the average closing below 36,250, just barely. It is too close to call, but the call for a 2b topping pattern still works and grows stronger.
Netflix (NFLX)
Netflix gapped below its 2020 trendline, and it appears to have fallen outside of its rising wedge pattern. We could finally see this stock fall back into the $480 region.
NXP (NXPI)
NXP Semiconductor appears to form a rising wedge of its own, perhaps a wedge inside a wedge. Regardless, there is a wedge and could be looking at $180.
I really can’t find any other stocks that look like they are ready to move, just in holding patterns for now. Tomorrow should bring a lot of clarity.
-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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