Water dam and reservoir lake aerial panoramic view in French Alps mountains generating hydroelectricity. Low CO2 footprint, decarbonize, renewable energy, sustainable development. Hydro power.

Stocks May Be Unleashed On August 19, 2022

This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.

Otherwise, enjoy the column!

Subscribe to the Monster Stock Market Commentary to get the Weekly Monster Market Commentary and join the 3,339 subscribers getting it for FREE!

The Daily Commentary has moved as of December 1, 2022

8/18/22

STOCKS – AMZN, TWLO, TSLA

\MACRO – SPY, QQQ, TIP

Mike’s Reading The Markets (RTM) Premium Content – $65/MONTH OR $520/YEAR – The First 2-weeks are FREE to try – GET 20% OFF!

(The *Free Trial offer is not available in the app stores, it can only be applied on the desktop version of the SA website)

Stocks managed to finish the day slightly higher, by 23 bps on the S&P 500. It was one of the more dull sessions of the summer, with the index pinned with the monthly options expiration tomorrow. The index options will expire on the opening, while stocks and ETFs will expire on the close. Most of the gamma, from what I can tell, will expire on the open with the S&P 500 index options. This should unleash the S&P 500 and the entire market to move more freely, from this static state.

I believe the S&P 500 is due to revert and see a significant portion of these gains vanish. There is a rising wedge pattern in the S&P 500 that has overstayed its welcome, in my opinion, and all we need is a solid move lower tomorrow to have that wedge break. I am targeting 3,950 for a number of reasons, including the massive gap that exist in that region, along with the now 61.8% retracement level that has been produced from the rally.

NASDAQ (QQQ)

A similar pattern is also present in the QQQ ETF, but instead of a rising wedge, there is a massive channel. Again, the QQQ is very close to breaking that lower bound of the channel, which could set up a steep decline to around $300, again at 61.8% retracement.

 

TIP

The TIP ETF moved up today after a strong 30-Yr TIP auction. The when-issued rate was 97 bps, and the high yield went out at 92 bps, so that caused the TIP yield curve to drop, which pushed the TIP ETF higher. That also helped to give technology sector and the NASDAQ a bit of a bid in the late afternoon.

Amazon (AMZN)

Amazon is trapped between its 200-day moving average and its ten day exponential moving average. Additionally, there is a very tough level of resistance, around $145. The RSI has turned lower, suggesting a loss of momentum, and the 200-day moving average should offer a stronger resistance level over the 10-Day EMA. It would be nice to see Amazon fill that gap at $123 over the next few weeks.

 

Tesla (TSLA)

There is a potential 2b top reversal pattern in Tesla. On August 16, the stock tried to take out the August 4 highs, and was rejected. Additionally, the RSI has turned lower as well, with the implication for the stock to fall back to roughly $750 over time.

Twilio (TWLO)

Twilio is very close to breaking a major support level at $80. I think Twilio could be a sign of what is to come if this stock breaks support. If support at $80 breaks, I think it can go to around $65, and it would probably signal the start of the next leg lower for the entire market, because there are number of once high-flying stock in a very similar position.

-Mike

Charts used with the permission of Bloomberg Finance LP. 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.