May 10, 2021
STOCKS – AMZN, JD, MU, FCX
MACRO – SPY, COPPER
- RTM Video – Capitulation?
- RTM MORNING – Reflation Trade May Be Running Out Of Room
- Measuring The Life Cycle Of The Reflation Trade
- MORNING NOTE- TOO MUCH OF A GOOD THING
- Is The Reflation Trade Ready To Deflation?
- RTM MORNING: WE ARE THIS CLOSE TO THE CLIFFS END
Stocks had a very lopsided day, with the S&P 500 dropping by around 1%, while the NASDAQ fell by nearly 2.7%. The growth stocks got hit the hardest, while the reflation names had some big intra-reversal. Overall, today was not a pretty day, with many big reversals throughout, not just in stocks, with copper marking a big reversal lower.
For now, the 5-wave count I pointed out on Sunday stands and based on that, I would think the index could finally make that push back to 3,960 we spoke about a month ago.
The copper reversal was notable, especially after a big run-up. It is the type of price action you see at the end of a run higher. Copper has certainly had a big run higher, and drop back to $4.50 certainly doesn’t seem unlikely.
Freeport was one of the stocks that had a big reversal today after gapping higher. It left the stock trading below support at $43.60. Given the big reversal today, it would not be surprising in the least to see the stock reverse lower towards $39.
Amazon comes to a crossroads as it approaches its 200-day moving average. This could be a big turning point for the stock, as a break of the 200-day moving average would certainly be a long-term momentum breaker. It has already tested this level once and survived; the question is if it can do it again? The only difference is that this time, the 50-day and the 200-day meet to form a death cross.
The selling has come on strong volume.
Micron was hit hard today, too, falling by almost 6%. The stock is probably now on its way to $74. I have been waiting for $74 for a while; maybe this time, it finally happens. The RSI says there is further to fall.
JD.com has to hold support at $67.30 to avoid a bigger meltdown. The death cross is in play with the 50-day crossing over the 200-day.
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.