Stocks – NFLX, AMD, SHOP, TSLA, XOM
Macro – SPY, VLUE
- Rotation Into Value May Have Further To Climb
- Quiet Monday, Plus A Check On Bitcoin
- Mounting Evidence Supports A Market Drop – Week Ahead
- Stocks Drift, Will Nvidia Save The Day?
- Bonds Signaling Double-Dip Recession?
- 2 Long-Term Theme Ideas And Valuations
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN TSLA
It was a rotation day, with the S&P 500 rising by 58 basis points and the Qs finishing the day around flat. The rotation trade was notable and visible by the Momentum ETF (MTUM) finishing flat, the Value ETF (VLUE) trading higher by 2.4%, a rather wide range.
Clearly, another round of positive vaccine helped this rotation trade out. But more importantly, we can see that the vaccine news cycle has largely played out, and the narrative for higher prices isn’t working anymore. When listening to people on the TV, it sounds as if the world couldn’t be more perfect for the market, whether I agree with that or not is another story.
Stocks also got a boost following the mid-month PMI Flash reading, which was much better than expected. After having some time to think it through, the market gave back most of the gains. The better than expected data actually suggests that perhaps there isn’t a need for another big stimulus bill worth trillions upon trillions. Perhaps it means a smaller, more targeted package is appropriate to think about. The dollar realized it right away.
S&P 500 (SPY)
It was the word that Janet Yellen would likely be nominated as Treasury Secretary that sent the index higher into the close. Still, the index continues to stall out and is struggling to get over resistance around 3,600.
Meanwhile, the VLUE ETF appears to be breaking out of a trading range and may target that gap to fill around with $87.25 as the next stop.
Notice how AMD today rose to resistance at $87 and failed. Not the greatest sign for the stock. The stock has gone nowhere since the beginning of August, and it seems likely to head back to $75.
Tesla broke out today, as I noted early in the chat update. For now, I’m leaving the next level of resistance at $575. It should probably be even higher than that, but I’m not getting ahead of myself.
Exxon continues to rip, and if it clears $39.50, it probably has a path to $41.25.
Oh, look, there’s a downtrend in Shop’s stock price to go along with the one in its RSI. A drop to $850 still looks reasonable, with a chance to drop to $740.
Surprisingly Netflix struggled today despite getting a price target boost from JPMorgan to $628 from $615. The stock closed at $476 and is very close to breaking that support of $470. The RSI suggests that the floor at $470 does break.
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