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2/2/2022
STOCKS – FB, AMZN, PYPL
MACRO – SPY, QQQ
- RTM: From Oversold To Overbought In A Week
- RTM: Thematic Growth Portfolio 4Q Letter
- RTM: Real Yields Fall, Resulting In Market Rally
- RTM: Roblox Update
- RTM Technical Take – End Of Week Short Covering Rally
- RTM: Liquidity Seems To Be Thinning Out
- RTM: Looking For New Lows
- RTM: Fed DUMPS Stocks For Real Economy – Audio
The market rallied today, but held where it counted on the S&P and Nasdaq Futures. The S&P 500 rose by almost 1% today, close at 4,589. The futures may have been more critical because it hit resistance at the downtrend, and that is where it stopped, which matters. We don’t want to see the futures rise beyond that 4,580 area. Otherwise, we start running into many problems technically.
The S&P 500 cash had risen just a little above our downtrend into that yellow triangle I mentioned yesterday. So why the difference in the downtrend? It could be several things, such as the different trading times or how I even drew it out. Despite the rally, the Advance/Decline fell, and the RSI is right at resistance.
NASDAQ (QQQ)
The NASDAQ Futures also hit resistance at the downtrend and are trading sharply lower this evening. I hope this ends the wave four counter-trend moves for the S&P 500 and the Nasdaq and starts wave 5 down. If these downtrends are worth anything, then they hold, and we revisit 4,430 S&P 500 futures and 14,530 on Nasdaq.
Meta (FB)
The decline this evening is due to Facebook, which missed on its fourth-quarter earnings, and then gave weaker than expected 1Q sales guidance. The stock is down over 20% tonight and trading to support at $255. There is a good chance this stock is also going back to pre-pandemic levels. I know it sounds crazy, but look at what is happening in stocks like PayPal, Netflix, Roku, Square, etc. They are all going back to or around pre-pandemic levels. Don’t rule it out.
PayPal (PYPL)
PayPal has obliterated today, falling back to $130, and finally filling the gap. The next support region comes at $125, and it is possible the lows aren’t in yet.
Amazon (AMZN)
If you own Amazon, you can’t help but feel a little nervous unless Amazon has a trick up its sleeve like a stock split; you have to wonder what happens if they miss any metrics. You have to think they are seeing higher costs, and as I have noted, retail sales in December were weak, so I can easily see some margin pressure. That means AWS has to put out a stellar quarter because so much of Amazon’s operating income comes from AWS. There will be no room for error for these guys tomorrow. But when you look at the chart, you have to wonder what the market already has priced in or worse, already knows.
We will see what tomorrow brings.
-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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