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August 28, 2020
STOCKS – V, MA, PYPL, SQ
Macro – SPY, XBI, HGX
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- S&P 500 Stuck At 3,500
- Big Volatility Lies Ahead For Netflix
- Everything Is Extremely Overbought
- The Equity Market Isn’t The Sharpest Tool In The Shed
- Morning Commentary – Write Up
- An Amazon Drop May Be Coming
- A Monster Hedge Against Several Technology Winners
- Signs Still Point Lower For The NASDAQ
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN V, MA, MSFT, AAPL, TSLA
Stocks increased yet again, and are pushing the boundaries here in terms of how overbought they are going to get. The S&P 500 surged to 3,508 and an RSI over 79. If we keep climbing, the next level of resistance comes at 3,527. To say the market will keep rising seems like complete lunacy, but that what it does. The Fed hasn’t increased its balance sheets in weeks; there is still no relief bill insight. So, not sure here what derails things at this point. Apple and Tesla will both split their shares on Monday, so perhaps that will shift the tied? Not sure.
I, for one, would not be chasing the market up here, but I haven’t been fond of this market the entire time. I have been a happy holder of the stocks I own, and the cash levels I have carried. Luckily, for me, I have owned the right stocks. 
You can tell, algo’s/traders whatever you want to call them, are just rotating around at this point, looking catch-up trades. I complained for weeks about how Square and PayPal were rising, and how Visa and Mastercard were not participating. Well, that suddenly shifted, with PayPal and Square going nowhere and Visa and Mastercard surging. V and MA have a lot of ground to catch up on, but it seems like that is the trade that is taking place. I’m certainly not going to complain.
Noteworthy, in just one week, we went from the number of stocks in the S&P 500 above their 50-day moving average from 64.8% to 81%. Why is this amazing, because since 2012, the 85% region tends to the upper end of the range. Basically, from a near breakdown level to near overbought levels in a week.
Housing Sector (HGX)
Keep an eye on the HGX, remember it told us the Fall of 2018 crash was coming. Nothing to worry about yet.
Biotech (XBI)
Maybe vaccine fever has pasted, but the XBI hasn’t been a strong performer since July 20.
Have a great Friday
-Mike
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.
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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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