This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.
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STOCKS – C, ZM, ROKU
MACRO – SPY, QQQ, AUDJPY
- RTM: Stocks Stall Below Resistance
- RTM: The Bond Market Warnings Grow Stronger
- RTM Exclusive: Uber’s Stock May Be Ready To Surge
- RTM: Stocks Rally, As Fed Fund Futures Price First Hike In May
- RTM: Global Market Deleveraging Event Is On The Horizon As Market Prepares For Faster Fed Taper
- RTM- Market Has Woken Up To The Reality
- RTM- Snapback From Oversold
- RTM: The Fed Is Tapering Into Slowing Growth Narrative Has Arrived
- RTM- Taper Still On And Is Not Going To Sit Well With Stocks
- RTM- Replay Of Live Session
It was a super dull day, with the VIX closing below 20. With a big volatility melt yesterday, the S&P 500 struggled to get its footing today. Essentially, the index has been churning around this 4700 level since the beginning of November.
The gap from November 26 is now completely sealed, and the S&P 500 briefly moved above that resistance level but was unable to close there. Interestingly, the index rose to 4705.06, with just 10 minutes left in the day, but finished at 4701.22. I mention this because the old closing high was 4704.55 on November 18, and it closed at 4701.45 on November 24. The previous high was back on November 8 at 4701.69.
I bring this up because the big rally over the last three days has left the index just shy of a new high, but more importantly, just shy of each of the previous highs. It also would give us a pretty near-perfect triple top in the S&P 500 if we should reverse lower from here. It is a big IF, and there is no doubt in mind if I detect something so small and minute, the algo’s have already done the same.
There is also a right-angled descending broadening wedge pattern. The data is pretty mixed on what this means as to whether it is considered a bullish or bearish pattern. I have minimal experience with them myself, so there is a lot of guesswork on my part here. But I counted the touchpoints from one side to the other and based on the number of touches from high to low and back; it works out that the most recent touchpoint was an “E,” which would also support the triple top pattern narrative above—suggesting a move down. Nothing would be confirmed even if we dropped tomorrow until we took out the most recent lows around 4,500. So, for now, we can wait and see.
The Qs did not fill the gap today, which I was surprised by. If it doesn’t start to fill tomorrow, I would be concerned; it is not going to fill anytime soon. We might want to also consider a head and shoulder pattern here.
The AUDJPY fx pair has also been strong recently, but it is up against the 23.6% Fib trend, which has offered resistance. I would currency cross to turn lower and back below 80.
Roku had a strong day today and is about halfway back to $285. I expect that will continue to push towards that price.
The gap for Zoom is now filled, and the stock is now completely oversold. It probably has one more push higher over the short-term on its ultimate path lower, with a stop at $230.
Citigroup said its trading revenue would be flat or down from the fourth quarter of 2019 at today’s Goldman conference. The stock is now sitting on support at $62.50. If that support level breaks, it could fall to around $58.65.
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. Past performance is not indicative of future results.