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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September 14, 2021
Stocks – AAPL, NFLX, ROKU, CMCSA
Macro – SPY, VIX
- RTM- This Is Not The Same BTD Market
- RTM Exclusive – GM Nears Massive Breakdown
- RTM – Low Rates Won’t Save The Stock Market
- RTM Exclusive – More Call Buying In Merck
- RTM Tactical Update: Earnings Estimates For The S&P 500 May Be Too High
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF APPLE
Stocks fell today, closing right on our 4,440 level of support on the S&P 500. As noted yesterday, it completed a gap fill from August 20. But really, more importantly, perhaps, is that the index finished the day below the October 2020 uptrend. That could be a meaningful event because when trend lines break, new trends are formed, and that is a downtrend for now.
The biggest problem is the quadruple witching event that will take place this Friday and the FOMC meeting next week. This could result in traders opting not to sell volatility, especially into the FOMC meeting. That means we will not get the usual sharp rally in the market on pullbacks. In fact, the VIX hardly even moved today, basically finishing the day flat. Which I found to be interesting and do not have a great explanation for at this point.
S&P 500 (SPY)
There will be a lot on the line tomorrow, especially if the S&P 500 gaps down below 4,440. It would signal a further decline to somewhere around 4,360. Additionally, that would likely send the RSI on the index below 42, which could be big. SINCE FEBRUARY, the RSI on the S&P 500 has been a source of support on several occasions. I can’t explain why the index finds support at 42, but it does coincide with the 50-day moving average, which has also served as support in the past.
Apple finished the day lower by around 1%, following an uninspiring debut of its new iPhone. It is really just a mild upgrade to the iPhone 12. I don’t see it being a big deal. The stock managed to finish the day at the 50-day moving average, but there is a divergence with the RSI, and I still think it heads lower to $130.
Netflix was down around 2% today, and it looks like the gamma squeeze is now unwinding. The stock managed to hold on to support at $575. That is really the key level here, with a break setting up a drop back to $545, which I expect to happen. (This should be free to read- Netflix Stock: Gamma Squeeze May Be Ready To Pop)
Not a fun day for Roku as the melt continues. The next support level does not come until $295. It is too expensive even at that price.
Comcast had a horrible day after the company lowered expectations around net additions for the quarter. The stock plunged 7% following the news and broke the uptrend that had been working so well. So chalk that one up to not working out as planned.
Have a good one
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.