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April 8, 2021
STOCKS – ADBE, SQ, PYPL, PTON
MACRO – SPY, VVIX
Mike’s Reading The Markets (RTM) Premium Content – FREE 2-WEEK TRIAL
- Midday Note- Setting Up For A Rug Pull
- Live Webcast Tomorrow At NOON
- Morning Note – Here To Pump You Up
- Midday: Stocks Stall As Fed Minutes Reveal Little
- Morning Note -Growth Sell-Off May Not Be Over
- Midday- Inflation Expectations Fall
- Morning Note: Despite Index Level Gains, Very Little Has Changed
Stocks gapped higher again and did nothing the rest of the day. You have to love it. Volume levels were pretty weak today in the QQQ and the S&P 500 e-mini’s. You have to think at this point; these overnight gaps are directly tied to the positioning or fine-tuning of hedges going into next week.
The big open interest levels in the S&P 500 remain down at 4,000, 4050, and 4,100. There is very little, if anything, above 4,100, even when we look into May. It suggests it will be hard for the S&P 500 to push meaningfully above 4,100 while indicating the index is likely getting ahead of itself.
But anything is possible; S&P 500 futures are already trading higher tonight, after the close on no news. Clearly moving in ahead of Frenzy Friday when everyone gets long over the weekend for the Manic Monday gap higher.
Make no mistake; the S&P 500 is overbought, it doesn’t mean it can’t stay overbought. The RSI on the S&P 500 is now just about 70 while trading above its upper Bollinger band. It is what it is, whether you think the market is going higher or not, just realizing where the market is critical.
VVIX
The CBOE VIX Volatility Index (VVIX) was up 3.7% today and moved back over 100. This is always important to pay attention to because it can lead the VIX to move higher. Again, one day may not matter much, but string together a couple of days, and you might want to buckle up.
I know you wonder why I care so much about call volume, but it does seem to ebb and flow with the S&P 500 index itself. Right now, call volume is diverging from the S&P 500 by a wide margin. Anyway…
Speaking of divergences, we now see inflation expectations starting to move lower. On a few occasions when these inflation expectations fell as the S&P 500 rose, it resulted in the S&P 500 following.
Adobe (ADBE)
This is Adobe’s fourth attempt to get above resistance $500. It just seems like the timing couldn’t be worse for it. The RSI is nearly at 70, and the stock is overbought based on the Bollinger band. Does that mean it can’t break out and push higher, no? Of course, it could break out. However, it doesn’t seem favorable at the moment for a breakout to occur.
Square (SQ)
Square is doing well, and even the RSI has turned higher. There is a gap to fill at $267.
Peloton (PTON)
Peloton looks decent currently. With its next level of resistance at $127.50, the RSI is turning up a push above that, and it could even move up to $139.
PayPal may even have a bit further to go before filling a gap at $268.50.
Have a good one
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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