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September 23, 2021
Stocks – NKE, GE, F
Macro – SPY, VIX, DJT
Mike’s Reading The Markets (RTM) Premium Content – $45/MONTH OR $400/YEAR
- RTM: VIX Crush Sending Stocks Up
- RTM Exclusive- GE Maybe Poised For A Big Rebound
- RTM- The Taper Is Coming “Soon”
- RTM Exclusive – AMD Nears A Massive Break Of Support
- RTM- Gearing Up For The Eye Of The Storm
- RTM Exclusive: Teladoc’s Stock Is Ready To Unravel
- RTM- Targeting The 200 Day-Moving Average
- RTM Tactical Update: Earnings Trends May Have Started On A Path Lower
Stocks ripped higher on Thursday with the Bull back in control. Never mind FedEx’s miserable quarter, forget the weaker than expected flash PMI–with a horrible commentary, forget about Nikes miss on revenues and weaker than expected guidance. Everything is great! At least, that is what I heard from the people on TV today.
The reason the market rose today is simple: implied volatility was crushed, AKA the VIX dropping like a stone. The VIX ripped higher on Friday of last week and Monday of this week. Now that two event risks have been “apparently” removed, the volatility sellers are back, pushing the VIX down and pushing stocks up.
You can see the shift in the term structure from Monday till today. It was a massive move lower in the spot market.
The significant drop erased all of the gains the VIX has seen since September 16.
S&P 500 (SPY)
Interestingly, the S&P 500 did not get back to its closing level on September 16, as the VIX did. If the S&P 500 rips again tomorrow, maybe we can talk about retesting the highs and saying everything is fine and dandy. The market was oversold, and the VIX was overbid on Monday, so, unfortunately, we get these reflexive trades that are equally as violent.
Interestingly, the S&P 500 closed right on the 61.8% retracement level of the move down from September 3 until Monday’s bottom. Additionally, it closed right on the downtrend. The same downtrend which I mentioned in yesterday’s commentary. So from my vantage point, it would seem that we could merely be in a corrective wave higher, in another wise longer-term downtrend.
Dow Jones Transports
The Transport soared today by 1.7%, yep. Right back to resistance at that 200-day moving average and failed. It is only down 12% from its highs.
Nike (NKE)
Nike needs to hold on to this $153 region of the chart, or a massive gap fill is coming. That guidance cut doesn’t look good, whether it is supply-chain related or not.
GE (GE)
Wow, I just noticed GE moved up 4%. I missed that today. Maybe that cup and handle pattern will play out, and the stock gets back to $115.
Ford (F)
What’s the deal with Ford? One day it looks like it’s on life support; the next day, it seems like it’s going back to $14. This thing does not want to cooperate with me.
Anyway, I’m super tired.
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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