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3/31/22
STOCKS – ADBE, AMZN, HD
MACRO – SPY
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Stocks finished the day lower, dropping by more than 1.5%. Most of the selling emerged in the final ten minutes of the day when a massive $10 billion sell imbalance for the closing cross appeared. It was likely the last of the quarterly rebalancing. Ultimately, now that we have made it through multi-option expiration days and two weeks of rebalancing, the markets are likely to turn their attention back to the Fed and the economy.
That starts tomorrow with the job report. I don’t think the numbers mean much unless they are a massive beat or a massive miss. The biggest thing I will be watching is wages. A number too hot means the Fed is too far behind the curve; a big miss means the consumer can’t keep up with inflation. So again, it would be best if you had something around the expectations of 0.4% m/m and 5.5% y/y. Then at 10 AM, we get the ISM reading, which will be the first read on inflation for March; with the prices paid index, estimates are for 80.
S&P 500 (SPY)
The S&P 500 closed around 4530, and depending on how positioning goes from today; the index could be in negative gamma territory by tomorrow, which means more volatility. The next big level of support for the S&P 500 comes around 4510. But you can see the big uptrend in the index is now broken.
Home Depot (HD)
Home Depot has dropped the last few days and is now sitting on significant support. It is a big deal and one stock that must be watched. It is both sensitive to housing and consumer spending. Once $299 goes, it probably goes back to $285.
Adobe (ADBE)
I was watching Adobe closely, too, as it has filled the gap from earnings and since then has moved lower. An inverse Head And Shoulders pattern could be formed, which is bullish, but a failure would signal a continuation of the selling. So this one should be watched closely. At this point, it is failing.
Amazon (AMZN)
Amazon moved up over resistance for two days, and today it slumped back below resistance. The $3,300 region has proven tough resistance; even the RSI fell below the trend line after a failed breakout attempt. I think this stock continues to go nowhere for the foreseeable future, it is going to take better than expected results to change the narrative here, and that is about a month away.
Good Luck
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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