MARCH 30, 2020

STOCKS: AAPL, AMZN, UBER, FB

MACRO: SPY, VIX

MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN APPLE

TONIGHT AT 9:00 PM CHINA MANUFACTURING PMI – EST FOR 35.7

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• History Suggests Long-Term Trends For Stocks Still Intact
• Market Still In Prove Me State
• Oil Falls Sharply – Morning Commentary 3.30.20

The Dallas Fed reported its manufacturing index for March, and it was the worsts reading on record going back to 2004.

But still, stocks rose sharply on Monday, recovering much of what they lost late Friday afternoon. But in reality, the S&P 500 hasn’t gone much of anywhere since March 26, so I would not call today’s rally a win.

An increase above last Thursday close would be a positive and likely result in another leg higher in the market. Perhaps back to 2,720.

The RSI is trending higher, but has also stalled out, while volume levels appear to be in decline. It could be an indicating that the number of buyers are thinning out. It is something that will need to be watched. 

VIX 

The VIX also came down some today, and that is also a positive sign, falling to 57. Don’t get me wrong, that is still incredibly high, but it is better than nothing.

Oil 

Oil fell below $20 briefly today, and there is a good chance now it falls further to perhaps around $17.

I’m still suspicious about this market, the economic data is dreadful, and in most cases worst than 2008 levels. I realize this time may be “different,” but there will be a significant economic fall out from this period. Earnings in 2020 will decline sharply, as company after company pulls its guidance, with RH being the latest after the close tonight.

It could be a case of quarterly rebalancing taking place, helping to push stocks higher, which has likely already started. Now, I never worked at a pension fund, but I have bought 100’s of thousand or even million’s of shares of individual stocks throughout my trading career, and I can tell you that in most cases, this can not be done in one day. So most of this rebalancing process has already started. What will happen on April 1, or even into the close tomorrow when the buy imbalances turn out to be for sale? I do not know.

Amazon (AMZN) 

Amazon continues to perform well, with $2000, the next significant level to look for.

Apple (AAPL)

Apple rose today as well but is still unable to get above resistance at $258.

Uber (UBER) 

Uber keeps butting up against resistance at $28, with $30.50 the next level to watch. I noted some bullish betting in this one, in a story from earlier today, but the options don’t expire until September. 

Facebook (FB) 

Facebook has this rising wedge pattern, and that could suggest that the stock is likely to reverse lower towards $148.

Have a good night

-Mike

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