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2/14/2022
STOCKS – ROKU, CRM, SPLK
MACRO – SPY, RINF
- RTM: Don’t Forget About The Elevated VIX
- RTM First Look: Nvidia’s Shares Face A Steep Drop Following Results
- Technical Take- The S&P 500 Sees Major Damage The Week Of February 11
- RTM: DOUBLE TOP CONFIRMATION? PLUS NVIDIA THOUGHTS
- RTM First Look: QQQs Heading To New Lows?
- RTM: Is It Time To Think Recession
- CPI Update
- RTM Exclusive: PayPal – A Big Bounce May Be In-Store
THIS WEEKS FREE YOUTUBE VIDEO:Â DOUBLE TOP CONFIRMED?
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SPLK
On Monday, stocks finished lower, with the S&P 500 dropping by 38 basis points and the Qs finishing the day up 12 bps. There was no real direction today with the equity market selling off on Russia/Ukraine headlines, but other than that pretty uneventful.
Yields
Yields did move higher today, with the 2-year climbing to 1.58% and the 10-Year to 1.98%. So why didn’t markets fall more? Interestingly, real rates are now trading at -0.94 basis points. Real yields fell because it seems the market is pricing in higher breakeven inflation rates, with the 5-yr rising to 2.87% BEI. Tomorrow’s PPI reading is estimated at 9.1%, down from 9.7% last month. A hotter number would be devastating for the market, pushing yields higher and real yields higher too, but I expect that real yields will probably rise less than nominal rates at this point. A miss on PPI probably eases some rate pressures and allows for inflation expectations to drop.
Bottom line, I still think the 5-yr TIP rises to -0.5%, but it just maybe at a slower pace.
S&P 500 (SPY)
For the S&P 500, it just seemed like a consolidation day for the bulls couldn’t keep any momentum, and the bears didn’t seem sure if they were ready to take the market lower. There has been a big seller in the market; I’m pretty convinced of that. I had alerted members of RTM to a 3:15 ET seller that had been showing up a few days in a row over the past two weeks, then they disappeared. Now they appear to be back around 1:15 ET. Look, you can say there is news moving the market, or perhaps the seller is using the headlines to push out their stock. But patterns like this are usually not by chance.
Roku (ROKU)
Roku continued to do what it has done since July, failing at the trend line and pushing lower. That’s what happened again today. Earnings really will be a make-or-break moment. I might use that for a title if I decide to write something.
Splunk (SPLK)
Splunk rose by 9% today on rumors Cisco was interested in buying the company. I would prefer guide them down and beat by a penny Cisco not be interested. I’m not looking for Cisco to come in with a 20% premium or something; it is not why I bought Splunk in June. Anyway, I think it serves to remind investors that Splunk has an attractive valuation at current levels and another reason why the stock has been so strong, around $110 to $120. If the stock clears $130, it would have a reasonable chance to get back to $168, about 30% higher and better than Cisco would probably offer.
Salesforce (CRM)
The Salesforce chart looks pretty bad, and with it sitting on support at $164, you have to wonder if it faces the same fate as many other stocks, which is going back to pre-pandemic levels. I will tell you it looks like pre-pandemic levels are what comes next.
Have a good one.
Mike
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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.
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