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October 18, 2021
Stocks – AAPL, MU, PYPL
Macro – SPY, VIX, TLT
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- RTM: Stocks Stall On VIX And Dollar
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- RTM Tactical Update: The Dollar Will Determine The Equity Markets Next Move
- RTM – Volatility Should Return Next Week
- Short-Covering Really Ahead Of OPEX
- RTM – The Market May Be Worried About Growth
MICHAEL KRAMER AND THE CLIENT OF MOTT CAPITAL OWN AAPL
The S&P 500 finished the day higher by around 35 bps, but it was more mixed than that. The equal-weight S&P 500 ended the day higher by just four bps. The divergence was due to the help of the mega-cap stocks lifting the broader index higher, with FAAMG+T all helping and contributing most of the gains. The only two sectors to finish firmly green were technology and consumer discretionary’s.
There is a nearly perfect diamond pattern in the S&P 500, a very bearish reversal pattern. Today’s high was in line with a 78.6% Fib retracement of the peak to trough move lower from the past few weeks. Plus, with all of those open lower gaps, a drop to 4,360 would make a lot of sense. Tomorrow is Tuesday, and that day of the week is most famous for, well, turnarounds.
VIX (VIX)
The VIX finished the day slightly higher, at 16.30. Now, I know technical analysis on the VIX isn’t “suppose” to work. Still, you can see the shape of the falling wedge in the chart, a reversal pattern. Who knows, it may even be confirming the bearish diamond pattern in the S&P 500 above.
Shanghai Comp (SSE)
There is also that bearish descending triangle currently in the Shanghai Composite that bears watching after China’s horrible third-quarter GDP print last night.
Flatter Curve
Meanwhile, yields on the short-end of the curve continue to rise, with the 2-Year finishing the day up by two bps at 42 bps, while the 30-year finished the day down two bps at 2.03%. The prospects of QE are sending short-rates higher, while longer-term rates are pricing in slowing growth. It has the 30-2 yr spread on the verge of a massive breakdown, leading to significant curve flattening.
Apple (AAPL)
Apple had a stellar day on the back of its new AirPods and MacBook launch, plus these new M1 MAX/PRO chips. Maybe Apple has transformed into a company that deserves an Nvidia-like premium with these high-performance chips they are now producing? Something to think about for sure. The stock is struggling around resistance in this $145 to $146 level.
Micron (MU)
Can you believe that Digitimes is reporting that DRAM prices are likely to fall even more in the first quarter? Geez, Micron can’t get out of its own way. $58 is a long way from here.
PayPal (PYPL)
I had thought PayPal was going to head lower, but it is starting to look better these days. The stock held support at $257, and the RSI broke that downtrend. Now the shares appear to have formed a falling wedge pattern. A push above $271 sends the share higher to $280 for starters.
Have a good one.
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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