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STOCKS – RBLX, PYPL
MACRO – SPY, IEF, LQD, VIX, COPPER, OIL
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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN RBLX
It was an exciting day. The S&P 500 was close to breaking this morning, but it held. A Head And Shoulders pattern was present on the Intraday charts, and it was close to being confirmed. But the confirmation never happened. The index managed to bounce where it had to around 3,750 to avoid a significant drop.
The S&P 500 continues to struggle at 3,830, and we will have to see if the index can gap higher tomorrow, to break that resistance level.
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To keep this simple, the selling in the markets appears to have abated when Europe closed for the day—allowing the VIX to go into melting mode, with the VIX closing around 27.5 after peaking around 29.8.
Of course, this persistent move lower in implied volatility helped push the S&P 500 higher and off the lows to finish the day flat after falling by nearly 2%.
The IEF/LQD ratio continues to increase, and typically when this ratio moves up, it indicates tightening financial conditions and increasing volatility in the equity market. It is not a perfect relationship with the VIX, but if this IEF/LQD ratio continues to move higher, I would expect the VIX is going to follow.
Copper prices have been hammered, and the way it is trading, it seems like the global economy is falling off a cliff. If copper doesn’t bounce around this $3.40 level, the next stop of copper could be around $3.20.
Oil prices fell by almost 10% today to close below $100. Oil also closed below that key trend line that started in March 2021 and was resistance for some time and later became support in February 2022. If there is more follow-through to the downside tomorrow, that would be nasty for oil, opening the door to a drop to around $80.
PayPal still has a lot of positive trends going for it, with the bullish reversal pattern and the rising RSI. A jump to around $82 still seems possible for this one.
Roblox broke above resistance today at $35.60 and increased to around $40. That makes $45 the next viable spot for the stock in the short term.
Anyway, we will see what tomorrow brings.
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. 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.