3/30/22

STOCKS – NVDA, MU

MACRO – IWM, VIX, DOLLAR

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• RTM: Stocks To Reverse, Bond Yields To Fall?
• RTM: Fundamentals Unchanged [Daily Update]
• RTM: Volatility Measures Rise As Stocks Stall [Daily Udpate]
• RTM Exclusive: Betting On Surging Volatility (Short-Term Options Idea)
• RTM: The Most Important Close In Some Time
• RTM: Oh Nvidia [Daily Update]
• RTM Exclusive: Betting Exxon Drops [Short-Term Options Idea]

Stocks finished the day lower, with the S&P 500 falling by around 65 bps. There was nothing overly exciting about today, just a run-of-the-mill pullback at this point, which couldn’t fill the gap from yesterday’s opening. But we need to remember that things will dramatically change starting on Friday, when quarterly rebalancing is over, reality sets back in, and that is around the economy, inflation, and the Fed. Then things will heat up into the release of the FOMC minutes next Wednesday.

That means we will likely see a VIX that starts to rise from here and has bottomed as traders look to put hedges back on, sending the S&P 500 down. The VIX at 19.3 is pretty much as low as it has been in some time and is now at the lower end of the channel. I talked about this and more in today’s daily update for members of RTM ( First two-weeks are free to try – RTM: Stocks To Reverse, Bond Yields To Fall?)

Russell 2000 (IWM)

Today, the Russell had a pretty bearish move after testing significant resistance at 2,140, then trading lower today and going below all of the previous highs at 2,100. The Russell will need to rebound quickly tomorrow. Otherwise, the index is likely heading significantly lower.

Nvidia (NVDA)

The gamma squeeze in Nvidia is over, and the stock also broke its mini uptrend. I think this will be trading sub $265 very soon, and probably much lower than that.

Micron (MU)

I had thought Micron’s results were good from what I had initially read. But I guess they weren’t good enough. The stock traded up to $86 only to close at $79, a nearly 9% Intraday swing. The region between $75 and $77 seems critical for what happens next. My only thought of what I initially saw would be around the CAPEX, but I need to reread it; I haven’t had enough time.

Dollar

Finally, we need to keep a close eye on the Dollar index. It looks a triple top has formed and is now very close to confirming the pattern. A drop below 97.75 will be bad news for the dollar index and the Fed’s fight against inflation.

Mike