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November 4, 2021
Stocks – NVDA, PYPL, SQ, ROKU
Macro – SPY, QQQ, AUDJPY, VXN
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MICHAEL KRAMER OWNS SPY PUTS
Thank goodness the market still has Nvidia and Tesla. They are about the only stocks holding things together. This market has gotten so stupid. Wells Fargo raised Nvidia’s price target today to $320 from $245, so the market decided, let’s take it there today. So they ran the stock up to $313, more than 17%, with it closing up 12%.
The S&P 500 finished the day up 42 bps, with the RSI now up to 75.
Meanwhile, the Qs are going vertical, with an RSI that is now over 78. If this isn’t an image of euphoria, then I’m not sure what one is then. It certainly looks a lot like that rally into September 2020 or maybe that run-up into January 2018. On top of that, we are above the upper Bollinger band, so we should be at a point where the Qs drop the other way. Like literally at any moment.
The VXN continues to trend higher as well, and this is the same formula witnessed at the end of the September 2020 rally before it popped.
Meanwhile, the AUDJPY currency pair has reversed the other way, indicating that risk sentiment has shifted from bullish to bearish.
Square is falling by nearly 5% after reporting results tonight. What can I say, another overvalued stock that trades with a valuation it doesn’t deserve. I had talked about it for a long time, and it isn’t worth repeating at this point. The handwriting was on the wall when they used their inflated stock price to buy Affirm. If it drops below $230, it goes all the way down to $200.
PayPal (PYPL)
PayPal will report results next week, and this stock keeps dropping, and for good reasons. At this point, $230 becomes resistance and $213 support.
Roku managed to close at $289, which is support. I think it will cut right through support and starting the next leg lower to $228, once the Nasdaq 100 pops, which should literally happen at any moment now.
-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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