Stocks Plunge On March 2 With More Losses Likely To Follow

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MARCH 2, 2021

STOCKS – TSLA, AAPL, ROKU, ZM

MACRO – SPY, QQQ, IEF

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CLIENTS OF MOTT CAPITAL OWN TESLA AND APPLE

It was a rough session for equities today, specifically the grossly overvalued technology names. The S&P 500 did drop by around 80 bps, and I expect many of Monday’s gains to be wiped away, filling the technical gap at 3,810. There was no reason for the market to rise the way it did. Perhaps it was monthly inflows or implied volatility drop, but I don’t think there was any fundamental reason for it. Given that rates are where they are, I don’t see how anything has changed.

10-Year

The 10-Year has stabilized, but I would expect it to trade lower to around 1.3% before it trades higher again. Regardless it won’t help equity prices. Valuations are being re-set and that is clear.

NASDAQ 100 (QQQ)

It is quite clear that the NASDAQ 100, like the S&P 500, appears to be on a pace to refill its gap from Monday’s opening.

Roku (ROKU)

Roku filled the technical gap today after announcing a deal and a $1 billion equity offering. It isn’t clear to me when this deal will be priced. There does appear to be one layer of support left at $380 and once that goes, the stock should see a sharp drop back to $310.

Zoom (ZM)

Zoom had a horrible day, after starting higher by almost 10% it finished the day down 9%. The stock is likely to fall back to the deal price around $340, if $340 doesn’t hold, the flood gates will open. (SHOULD BE FREE TO READ – Zoom’s Results Were Not Good Enough)

Apple (AAPL)

Apple got up to resistance at $127.85, this is a bad sign, and suggests that Apple moves back to $120.

Tesla (TSLA)

Don’t think that gap in Tesla can’t get filled at $406. It can, and it likely will at some point over the next few weeks.

-Mike

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