August 15, 2020

STOCKS – CSCO, MU, V, LLY

MACRO – SPY, QQQ, LQD, FDN

Mike’s Reading The Markets (RTM) Premium Content – NOW WITH A 2 WEEK FREE TRIAL

• Visa Shares May Decline Over The Near Term
• Earnings Trends For The S&P 500 Continue To Drift Higher
• Dull Friday – Midday
• On Gap Watch For The S&P 500
• Warning Signs
• The Message Remains Unchanged, The Market Has Limited Upside
• S&P 500 At THE Critical Moment
• Risk-On Still Under Stress

MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN VISA

Stocks had a rather meaningless day of trading on Friday, with the S&P 500 falling by two bps, and the NASDAQ 100 falling 12 bps.  Still, the S&P 500 was unable to rise above resistance around the 3,385 level, having stalled out in this region. It may be just a matter of days before we find out what the S&P 500 next turn maybe. The RSI index is contracting quickly, and with the uptrend and downtrend forming a wedge. 

What is clear is that the RSI is printing lower highs, and that is a bearish divergence from the higher highs in the SPX. 

Again, it seems that, like the S&P 500, we are likely to know the fate of the Qs soon, perhaps also in just a number of days.  It seems for now that uptrend remains firm, but the upper bound of that uptrend has shifted. 

Meanwhile, the number of stocks in the NASDAQ 100 above its 50-day moving average has been quietly slipping lower. 

We can also see that the corporate bonds are now losing their bid, and yields are rising. Remember it was on July 29, we saw that giant put trade in the LQD ahead of the FOMC meeting.  (premium content, get the first two-weeks FREE- It All About The Fed, And Bets Are For Less Liquidity)

 

The FDN Internet ETF is also starting to roll-over with the 21-day moving flattening out. The uptrend is in serious trouble, and the RSI is flashing warning lights. 

I noted today some bearish bets in Visa and the fact that the stock has been unable to break above resistance at $200. It could result in the share falling back to $187, and potentially lower. (premium content – Visa Shares May Decline Over The Near Term)

Micron has been falling and it likely isn’t finished, with room to drop to around $42. 

Eli Lilly is very close to breaking support at $148, and potentially on its way to $132. 

Cisco may still have a bit further to fall, $41 is likely it is finally resting spot. 

Have a great Saturday

-Mike