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October 5, 2020
STOCKS – AAPL, SQ, AMD
Macro – SPY, TLT, LQD
Mike’s Reading The Markets (RTM) Premium Content – NOW WITH A 2 WEEK FREE TRIAL
- How To Find Technical Trends And Levels
- Re-Testing
- APPLE’S STOCK FACES FURTHER LOSSES BASED ON OPTIONS BETTING
- Stocks Point Higher As Monday Never Fails To Disappoint 😛
- 5 Themes For The Week Of October 5
- Bearish Pattern Persist, Lower Prices Likely -Midday
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL
Stocks shot up today, with the S&P 500 rising 1.8%, erasing all of Friday’s losses, and moving above last week’s highs. It was an impressive trading session. I don’t think that today’s price action takes the market out of the danger zone. It may have just delayed it.
S&P 500 (SPY)
I’m still of the mindset there is a bear flag in the S&P 500 and across most significant stocks. I think it is just going to take an advance to 3,425 to find out if I’m right or wrong. It is, for whatever reason, a little bit more visible in the S&P 500 ETF SPY.
Volume levels in the SPY were pretty weak today, and that usually isn’t a sign of strength.
You can see the setup nicely on the S&P 500 futures. Again, this looks like a classic pattern for lower prices to me.
10-Year (TLT)
Rates did move higher, and it likely came on expectations of another stimulus, or the better than expected ISM report. The rate on the 10-year had a big move, up to 78 bps. It seems like we could be heading up to around 92 bps.
Tips (TIP)
Meanwhile, the TIP ETF fell below its 50-day moving average for the first time in some time. It is okay for the TIP ETF to move lower as long as yields are rising. If the TIP starts going more down, with yields unchanged, that would be more of a concern, at this point.
AMD (AMD)
AMD is potentially forming a head and shoulders pattern but would need to fall below $72 for confirmation. It is early to say for sure, and a jump above $87 would kill the pattern. For those that don’t know, a head and shoulders is a bearish reversal pattern. The RSI suggests momentum is leaving the stock, indicating lower price right lie ahead.
Square (SQ)
Square went right to $181.50, as discussed last week. The RSI is trending lower, and making lower highs, despite the stock rising. It is a bearish divergence and an indication the stock heads lower from this point on.
Apple (AAPL)
Apple had a massive option bet placed against it on Friday, which showed up in the open interest today. It suggests the stock falls in the week ahead, and the chart still supports those lower prices too. I have owned Apple for well over two years, and the long-term story is fine, but it doesn’t mean that the stock can’t go down over the short-term from time-to-time.
-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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