APRIL 2, 2020

STOCKS: TSLA, WORK, ZM, SHOP

MACRO: SPY, OIL

MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN TSLA

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• STOCK MARKET RALLY MAY FADE
• Jobless Claims Soar, More Bearish Betting On SPX
• Data, Earnings, Techincal Suggest Lower Prices For Stocks

Oil 

The S&P 500 rallied today, recouping about half of yesterday’s losses, rising by about 2.25%. The rally today came at the surprise of many after the giant surge in initial jobless claims. However, the big surge followed a big jump in the price of Oil on hopes the Saudi’s and Russian can agree on an output cut. Yet, Oil still has a long way to go to get back into the $ $40s. Even with today’s rally, oil is still only trading around $25. 

S&P 500 (SPY)

The S&P 500 managed to finish the day right at resistance around 2,525. It was a level the index failed at yesterday and continues to be the level the index at failed today.

It seems possible that the index could rally to around 2,570, but it is where two robust levels of resistance live. An increase above that level would be a big positive. I’m just not sure that a break out above 2,570 is in the cards. 

As I have noted in the last two days, I have seen some significant options bets that indicate that the S&P 500 heads lower from these levels. I talked about it yesterday in my morning commentary for subscribers, and again in a free article today. We will see. 

The futures are pointing to a decline of about 50 basis points tomorrow. 

Tesla (TSLA)

Tesla is moving sharply higher tonight after reporting better than expected deliveries for the first quarter. The numbers looked impressive to me, considering that the Shanghai factory was closed for some time in February, and the Fremont factory was closed the last two weeks of March. The mystery will be what the second quarter will be, but if anyone can figure out how to get cars to people, Elon Musk can.

The stock jumped to resistance at $550 and stopped. That is resistance for now, with a break out sending the stock to $595.

Shopify (SHOP)

Not to beat up on Shop, but the stock fell sharply after pulling its 2020 guidance. It also fell below crucial support $360, and I think that puts $315 back into play.

Zoom (ZM)

Zoom is starting to look like some of those bubbly stocks everyone was complaining about in February. I know, I thought it was heading lower at the beginning of March, but now it looks even more ridiculously overvalued. I think it falls back to support at $105. The security and privacy stuff sounds like a real concern. 

Slack (WORK)

Slack fell even further than I thought that it might, now testing support at $24. With the potential to fall even further, maybe to $21.

Anyway, that’s all its getting late. 

-Mike

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