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STOCKS – RBLX, PYPL
MACRO – SPY, QQQ, TIP, Copper
- RTM: Recession Fears Grow [Daily Update]
- RTM: Next Live Session Will Be Friday, June 24 At 12:30 PM ET
- RTM: Energy Stocks May Be The Most Important Sector To Watch [Daily Update]
- RTM Portfolio Update: Acadia
- RTM: PayPal’s Stock May See A Momentum Shift Higher [Short-Term Options Idea]
- RTM: Liquidity Is Draining [Reserve Balance Update]
- RTM: Looking For An OPEX Counter-Trend Rally [Daily Update]
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN RBLX
Stocks managed to rally today during a strange trading session, with the S&P 500 finishing higher by 95 bps to close at 3,795. At this point, the movement we have seen in the market appears to resemble what we saw following the May options expiration, with a lot of churning. There is a slight upward bias right now to the pattern, but ultimately I just don’t see much going on here, and until the S&P 500 breaks 3,815, there is nothing to get excited about.
The QQQ is slightly different in that it has challenged $285 several times and has been able to break through. There also appears to be a rising wedge pattern that is present, which is bearish.
I stumbled on to the rising wedge in the QQQ, but I found it very quickly in the TIP ETF. The TIP ETF looks more like a bear pennant than a rising wedge. It is much easier to see and much more pronounced. If that is the correct pattern, then the TIP ETF is getting ready for another significant move lower, which means that real yields are due to rise. If the TIP ETF drops, then it likely means the QQQ ETF will follow it lower.
Copper was hit hard again today, dropping by 5% and falling to roughly $3.75. It looks oversold at this point, but based on this drop in copper, parts of the market are starting to buy into this recession story.
Falling oil and copper should help lower breakeven inflation expectations, implying that real rates will rise. That would match the idea of the TIP ETF dropping.
Roblox finally broke the downtrend and is below resistance at $34.50. The RSI also broke out to the upside, suggesting increasing bullish momentum. If the stock can clear $34.50, a run to $45 doesn’t seem impossible.
PayPal appears similar to Roblox but seems much earlier in the pattern. But the RSI appears to be turning to a more favorable position suggesting higher prices.
That’s going to be it for today.
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.