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Stocks Drop On August 30 And Near A Massive Inflection Point

This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.

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8/30/22

STOCKS – TSLA, AMD, NVDA

MACRO – SPY,

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Stocks managed to fall again, with the S&P 500 slumping 1.1%. The index got as low as 3,965, or 15 points from 3,950, and good enough for me, target hit. Believe it or not, this is where the hard part starts; because of this zone, I think it will determine a lot. I will sort of watch to see what the market does at this point before making more bold calls. The last three weeks have been tiring. But from today’s close to 3918, it is essential and will tell us much about what happens next.

If we drop below 3,920, it will not only open the door for more gap fills but also invalidate any hopes bulls have that the recent rally in the market has been the start of a new upcycle. It is possible to count the move starting with the June lows as an Elliot wave impulse or 5-wave cycle. The recent pullback could, in theory, be a wave four down and, if valid, lead to a wave five higher.

But if this move down or “wave 4” goes below 3,920, wave four would fall below the top of wave 1, which would invalidate the bullish count.

I think the most likely count is that we have completed an ABC up and are now in a five-wave cycle down. But again, that is why this region, around 3,920 is so essential. But given everything I know about the rest of the market, I think it is likely we will see lower prices in the future.

AMD (AMD)

AMD today finished a little bit above support at around $85.50. I would think it continues to drop, getting sucked lower with Nvidia. This probably means AMD could retest that $73 region in the not too distance future.

Tesla (TSLA)

Tesla appears to have broken the neckline on that Head And Shoulders pattern I have been watching today. I think this will result in the stock moving lower from here and filling those gaps down to $250.

Nvidia (NVDA)

Nvidia fell back to $154, a price that has been support in the past. A break of that price sends the shares back to recent lows, and given how horrible those results were, I wouldn’t be surprised to see new lows.

Have a great night.

-Mike

Charts used with the permission of Bloomberg Finance LP. 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.In