Subscribe to receive this FREE daily commentary directly in your email
May 17, 2021
STOCKS – JPM, WFC, CMG, TSM
MACRO – QQQ, SPY
Mike’s Reading The Markets (RTM) Premium Content – FREE 2-WEEK TRIAL
- RTM – Stocks Set To Open Lower On 5.17.21
- RTM: Relatives
- RTM Tactical Update – It May Be Time To Look For “Value” Among Growth Stocks
- Live Webcast Friday, 5/21 @ 1PM ET
- RTM Morning – Stocks Set To Bounce, Will It Hold?
- RTM Morning – Stocks Sink As Inflation Soars
It was a boring day on the surface, but beneath it, it was anything but. Lumber fell by 4.5%, and Bitcoin was briefly trading below 42,000. But the S&P 500 traded lower by just 26 bps, while the Qs finished the day lower by about 60 bps. It had been worse, but the market got a boost towards the end of the day.
S&P 500 (SPY)
It seems possible that the equity market makes a run-higher tomorrow in an attempt to fill that gap up at 4,188 created from today’s opening. There is a nice broadening wedge that has formed in the S&P 500. This appears to be a bearish formation, resulting in the index trading lower after the move higher.
NASDAQ (QQQ)
The same pattern is present in the Qs. However, this could change to some degree overnight because the patterns are also present in the futures and will continue to play out in the over nigh trading session.
S&P 500 Futures
The pattern is also in the S&P 500 futures. It doesn’t have to go all the way up to the E to complete the pattern; at this point, a simple breaking of the “B” and “D” uptrend will be enough.
Lumber
Meanwhile, Lumber could continue to fall. The 50-day moving average has offered support in the past, and that is another 10% down from Monday’s close.
Why do we care about Lumber? Because both Lumber and Bitcoin are melting together, we care about these because we care about the Russell 2000 and because it tells us about the state of the stock market.
Supposing that wasn’t enough, look at the carnage that has taken place in the Refinitiv most shorted index. Remember, this index led the Russell 2000 in the fall and early winter of 2020 higher. It has collapsed, and that as the Russell goes nowhere.
Taiwan Semi (TSM)
Taiwan Semi may be the most important stock in the entire market at the moment. The stock market in Taiwan has been hammered in recent days, and if chips represent the new age economy where Taiwan Semi goes will tell us a lot about what happens next. Support at $109 must hold for the stock; otherwise, the next level of support is around $100. The RSI suggests that either the 200-day moving average or support at $100 is tested.
Chipotle (CMG)
Chipotle is sitting on a big level of support that also needs to hold around $1,325 to $1,350. A break of support region sends the stock lower to $1,175.
JPMorgan (JPM)
The bank stocks still look fairly good, and that is because yields are likely to rise, and the spreads are still widening. So JPMorgan may still have about $10 more in upside until it runs out of steam. The RSI is already diverging, which is a warning.
Wells Fargo (WFC)
Meanwhile, Wells Fargo still has a gap to fill up at $52.
-Mike
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.
Subscribe to receive this FREE daily commentary directly in your email
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.
Liquidity Tightening And Volatility Patterns Suggest Risk Ahead
Mott Capital's Market Chronicles September 19, 2025 1:26 PM