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FEBRUARY 24, 2020
STOCKS: AMD, NVDA, AAPL, TSLA, ROKU
MACRO: SPY, EWY, EWG, EWH, GOLD
MICHAEL KRAMER OWNS SPY CALLS
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL, TSLA
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Stocks are falling around the globe on Coronavirus fears as uncertainties rise. What is the right answer to today’s reaction is difficult, because this happens to be one of those events that are hard to quantify, and that could be the biggest issue that the market will have.
Interestingly, based on the data that I saw last night, the number of new cases in China is falling. But that’s not going to matter much today, as investors focus on new cases in Italy and South Korea.
S&P 500 Futures
We can see on the charts that S&P 500 futures are down about 2.5% to 3,258, which are still just slightly higher than where we were on the January 31 lows. The RSI for ES has fallen to around 41, but the overall trends remain higher. I know that doesn’t sound comforting, but that what is.
S&P 500 (SPY)
The S&P 500 based on the futures is likely to open around 3,256, which unsurprisingly fills the gap created from the February 4 gap up. How the market handles, that level will give us a perfect clue as to what’s next. A break of that level sends shares to the low of 3216.
But part of me feels as if a sharp open lower may not last, and the market finds that bounce around 3,250. I guess I feel that way because we can see Germany is filling the gap, and it is finding some support around that region.
You can basically see the same thing in South Korea, and testing the January lows.
China
…and china was hardly down.
Hong Kong also filled a gap as well.
So will stock open lower, yes. How much further will they fall, I guess we can find out together.
Gold
Gold has gone parabolic, and is heading towards resistance at $1700, and appears to be in the process of signaling a bearish divergence on the RSI. The worst thing that can happen is to race into gold, only for it to reverse the other way.
Micron (MU)
Micron is falling today to support at $52.75. It is an essential level for Micron because after that level comes $48.75.
Tesla (TSLA)
Tesla is down slightly, and the stock has some support for around $850 and then $761. It is going to be interesting to see how this one trades today. Given the sharp run-up, one would expect to see this one down sharply. But for now, the overall trend is still higher.
AMD (AMD)
AMD is falling below the uptrend today, and where the stock closes will be a big deal. The significant level to watch is $46.80. That is the level that was like a rock post-earnings, and a break of $46.80 means shares fall further to $43.
Apple (AAPL)
Apple is falling below $300 and could be heading to $290. Surprisingly, these were the levels we were expecting it to fall to last week but never did. Interesting. 
Roku (ROKU)
Roku is falling below $116, and a close below that price likely sets up that decline to $100, we have spoken about.
Good luck today, it might suck, but we have been through this before, and unfortunately, we will be through at some point again. It happens, don’t fight it, don’t lament. Life goes on. I know it sounds complacent, but I have done this for 25 years, and it isn’t the first time I have seen, and it won’t be the last.
-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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