Stocks Finish Higher On February 29, 2024, Following A $4 billion Buy Imbalance

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2/29/24

#Stocks – $NVDA

#Macro – $NDX, #inflation, $SMH, $DXY

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Stocks finished the day higher, with some wild moves in the final minutes on a $4.1 billion buy imbalance, sending the NASDAQ up almost 1% and the S&P 500 up about 50 bps. The ramp higher started around 3 PM ET, which isn’t surprising given the size of the imbalance. Closing imbalances start accumulating at 2 PM ET, so if you can see those imbalances build, then some may try to front-run that imbalance, which appears to have happened here, and today was the month’s end.

I have been paying attention mainly to the NASDAQ over the last two weeks because it has been relatively easy to get a feel for what is happening with support and resistance. At this point, not much has changed. The NDX did manage to close at the upper end of the trading range, which has been pretty well defined between 17,850 and 18,050. At this point, it seems pretty easy because if the NASDAQ gaps higher tomorrow, resistance is broken, which, given where the Bollinger bands are, suggests an upside to 18,150 or, potentially, the upper end of the broadening wedge around 18,450. If the index breaks lower, support comes at 18,040 and then at 17,475.

The dollar rose today following the inline PCE report, and at this point, the DXY has been able to break above resistance at 104.25 until we see something meaningful happen with the dollar; it is tough to see the stock market caving, and that is because financial conditions just aren’t tightening enough to bring stocks down.

Meanwhile, the inflation swaps market must not have liked what it saw in the PCE report, and based on some “preliminary” data I am seeing, CPI swaps for June are now trading at 3.06% from the previous level of 2.9%. But I won’t be able to confirm that until tomorrow, so I will probably update that over the weekend. But the market is saying a year goes by with headline CPI y/y stuck at 3% or higher.

Nvidia can not get beyond the $800 level because the call wall is still there and hasn’t been rolled higher. The stock went up and touched that price today, and that is where it stopped once again.

In the meantime, the SMH was up 2% on the day, and it is trading at a 100% extension of wave “A,” and it has been unable to surpass the $212 level established last week. It is not to say that it has to turn lower here, but if you are looking for candidates and you believe in things like Fibanocci extensions and retracements, it seems like as good of a place as any for the rally to terminate.

Anyway, that’s all I have for today. ISM tomorrow, and we will see if shipping rates and gasoline show up in the prices paid.

Mike

Charts used with the permission of Bloomberg Finance L.P. 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.

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.