Subscribe to receive this FREE daily commentary directly in your email
August 20, 2020
STOCKS – ZM
Macro – SPY
August 20, 2020
STOCKS – MU, NVDA, GLD
MACRO – SPY, EWY
Mike’s Reading The Markets (RTM) Premium Content – NOW WITH A 2 WEEK FREE TRIAL
- Micron’s Stock Declines May Be Far From Over
- Breaking The Dollar – Morning Commentary Transcript
- Uptrends Still Holding For Now – Midday
- Uptrends Are At Risk
- No Yield Curve Control – Not Good For Equities
- It Approaches – Midday
- Memory Chips Sending A Warning Message?
- A Breaking Point Nears, One Way Or Another
ZOOM (ZM)
Do you know why a stock like Zoom was up 6.5% today? No, it isn’t because the stock is cheap trading with a $75 billion market cap. It is because there was a ton of options trading at the August 21 $285, $290, and $295 strike price. You also know something most of those calls were being bought. Do you know what it means? It means that there was a dealer out there selling those calls. That means they had hedged their risk out; you know how they do that? They buy Zoom’s stock. But you know what’s going to happen tomorrow, I’m willing to bet that at some point late tomorrow, the dealer who was hedging their position is going to start selling that stock because they are going to be over hedged heading into expiration. They will be long too many delta’s. That means, the stock will start going down, and probably even closes below $280, and that means the dealer gets to keep all those premiums. Thank you come again!
Just a hunch, who knows, maybe I’ll be wrong, I have been told flipping a coin gives better returns than my calls.
Anyway, that is what today was all about. I’m curious to see how the Asian markets trade tonight.
Also, what was even more surprising was the actual number of stocks on the NASDAQ 100 FELL today! Yes, the NASDAQ 100 was up 1.4%, but the number of shares above their 50-day moving average fell to around 71%. Healthy market.
Like I wrote this morning, the S&P 500 futures tested support at the uptrend, and it held. Again, as I said, you need to respect the uptrend. If it breaks troubles lies ahead.
One last thing, because I’m tired and have a headache, and my wife is getting on me to walk the dogs. Notice the equal-weight S&P 500. Notice that divergence. The market is not healthy.
-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.
Subscribe to receive this FREE daily commentary directly in your email
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.
A Waiting Game...
Mott Capital's Market Chronicles 5 hours ago