This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.
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STOCKS – ADBE, AMZN, HD
MACRO – SPY
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- 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, 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.
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 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.
Mott Capital Management, LLC is a registered investment adviser in the State of New York. 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. Please remember that past performance may not be indicative of future results.