7/20/22

STOCKS –  NFLX, TSLA, BA

MACRO – SPY, VIX

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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN BOEING

Stocks managed to rally on a very volatile day, with the S&P 500 rising by more than 1%, then falling back to flat, and then managing to finish up around 60 bps. The index was very close to breaking out today and clearing a resistance level at 3,960, but it got stuck up there, and stalled out. Additionally, the RSI has topped out on the 1hr chart, suggesting momentum may have peaked.

Additionally, we hit a resistance zone on my fib grid. I have found that this sell-off has been very symmetrical in direction. The current level of 3,950 could be one spot where the rally stalls out.

Vix (VIX)

Option flows have been very bearish the past two days, based on negative delta flows that suggest put buying and calling selling. But the VIX movements have been muted and have not reflected this negative option flow. I’m confused and frustrated by the action of the VIX. Sometimes, what should be happening and what happens doesn’t work out. The VVIX is near its lows and gives a sense of complacency in the market heading into the FOMC meeting next. If the VIX doesn’t rise, it will be going into the FOMC at its lowest level this year. It is an under / over I would not want to take the under on. But, hey there are a lot of people out there who think things are just great, because the S&P 500 has gone up a two days in a row.

Not to mention tomorrow we have an ECB meeting.

Tesla (TSLA)

Tesla is trading flat after reporting mixed results. The numbers look okay, not great. Interestingly, the company noted in the slide deck that they had converted nearly 75% of their bitcoin holdings into fiat currency. This did help to boost their free cash flow, while cash flow from operations fell for the second quarter in a row.

The stock is just consolidating at this point, with no real direction. The RSI is trending higher, suggesting bullish momentum, but the stock needs to get over $770 to make a significant move.

Boeing (BA)

Boeing rose above resistance today and has an RSI that is approaching 70. The stock has a bit further to climb before completing the gap fill at $167. The stock has a good chance to fill the gap, but I’m not sure there is much additional room for it to rise near-term after that.

Netflix (NFLX)

Netflix reported some of the worst results I have seen from them in a long time. Cash flow will become a focus for investors if it hasn’t already. Yes, the stock rose sharply today, but it had to bounce at some point. The RSI is approaching 70, and I think it is unlikely that the stock is beginning a new long-term uptrend. I don’t believe the stock will get much beyond $230.

Have a good one

Mike

Charts used with the permission of Bloomberg Finance L.P.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. 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.