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October 12, 2021
Stocks – AAPL, MU, PYPL
Macro – SPY, IEF
Mike’s Reading The Markets (RTM) Premium Content – $45/MONTH OR $400/YEAR
- RTM Exclusive – A Stronger Dollar May Sink Freeport McMoran
- RTM: The Stock Market Has Changed In Anticipation Of Fed Taper
- RTM – The Soaring Dollar Is A Stock Market Killer
- Tactical Update: The Market And The Fed May Be Heading For An Epic Showdown
- RTM Exclusive: Lemonade’s Stock Is Still Crazy Expensive And Likely To Fall Further
- RTM Exclusive: Intel’s Stock Is Far From Cheap And May Head Lower
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL
Another weak day for stocks as the S&P 500 finished down 24 bps, while the NASDAQ 100 finished down 35 bps. It was an incredibly dull day, with most of the activity happening in the final 45 minutes of the trading session. It was so boring that the VIX finished the day lower, closing down almost 1% at around 19.90. How many times do you see the VIX and the S&P 500 go down on the same day?
10-Year (IEF)
The 10-year fell more than five bps today, to 1.58%. The 10-year stalled out at 1.63%, which I had noted was a big resistance level. I know this isn’t a popular view, but I still think rates push lower from here on the long end of the curve. The dollar is strengthening very quickly, and as I have said multiple times, a stronger dollar is a growth killer. So what we might start to see is a curve that flattens as the market picks up on this stronger dollar/weak growth trend, with the front-end rising and back-end falling. If so, then the 10-year heads back to 1.52%, then back to 1.36%. That won’t be good for the banks, and probably why they have been so weak this week. (Premium content/video – RTM: The Stock Market Has Changed In Anticipation Of Fed Taper)
S&P 500 (SPY)
The S&P 500 has been hugging on to the 20-day moving average since October 7, unable to get above. Meanwhile, there is plenty of room for the index to take a shot at the lower Bollinger band, around 4,280.
If the bears want to maintain control of this market, they will need to undercut last week’s decline and drop below 4,280. There is a bear flag on the technical chart, indicating that a potential drop tomorrow. A retest of last week’s lows seems likely.
Apple (AAPL)
The bears may get an assist tomorrow on reports that Apple will cut the production of nearly 10 million iPhone units due to chip shortage. The report notes that Apple was expected to produce 90 million phones in the year’s final three months. The news will not help things tomorrow, and I would imagine the stock needs to trade lower. The shares are trading around $139.50 in the after-hours, and if that level breaks tomorrow, the next stop is probably the trend line around $133.
Micron (MU)
Micron FINALLY broke because of reports of memory price weakness; what a surprise. It has only been in the news cycle for two- weeks. I first mentioned this on October 2. Did it take the market nearly one and a half later to figure this out? Unreal. (Premium content from October 1 – RTM Exclusive: Micron May Head Lower Amid Falling Memory Prices)
Now that support at $69 is busted, I think it will continue on its way towards $58. It may take some time, but that is a big gap that needs to be filled.
PayPal (PYPL)
PayPal is very close to breaking down here, with a drop below $255, which should push it to $230. The RSI shows you that momentum is very bearish.
Ok, back tomorrow.
Mike
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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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