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12/29/20
Stocks – LMND, GME, NVDA, SNAP
Macro – SPY, XBI
Mike’s Reading The Markets (RTM) Premium Content – Get An Extra 20% Off Thru January 1.
- Midday Note – The Canaries Are Growing Louder
- Morning Note – Implied Volatility Is Rising
- RTM MIDDAY- Stocks Are Trying To Break Out
- RTM MORNING NOTE: Stocks Will Battle The Top End Of The Range.
- RTM Macro Note – New Leadership May Need To Emerge To Keep The Rally Alive
- RTM TWA – Stock Patterns Remain Bearish, As Rates Near A Breakout
- RTM MORNING NOTE- Rising Yields Are The Biggest Risk To Stocks – Don’t Discount It
S&P 500 (SPY)
Stock’s fell slightly on December 29 by about 20 bps on the S&P 500. More importantly, the index tested yesterday’s opening print on 2 occasions and held. I’m not sure if it matters all that much, but it is worth noting. A break of that level will result in a gap fill back to 3,702.
At least for now, we can consider today’s turnaround as a rejection of the new highs, finishing below yesterday’s closing price. Based on the chart, it seems as if there is a good chance we will see a gap fill before week’s end. 
I had mentioned yesterday how the SPY ETF failed to confirm the S&P 500 break out. Today it tried and failed to break out again, and failed, again. What I think is a negative sign for what’s to come.
Biotech (XBI)
The Russell and Biotech, the two big risk parts of the market, did not perform well. With the Biotech ETF (XBI) now down 7% this week alone. The ETF broke two major uptrends and is clinging to support around $142.70. A break of that support sets up what could be a drop to around the 50-day moving average at $130.
Lemonade (LMND)
Lemonade was up today, despite the lock-up period ending. Volume today was not noticeably different, which suggests there hasn’t been any selling of shares from the expiration date. It could be they are merely waiting until the new year for tax purposes? I’m not sure we will be watching tomorrow to see if there is a pick-up in volume.
You can see the RSI broke its uptrend, and I think that means we ultimately see lower prices. (Should be free to read- Lemonade’s Stock Declines May Have Only Begun)
Snap (SNAP)
Snap rose today after getting a Goldman Sachs price target boost to $70 from $47. That price target assumes a lot of good things go Snap’s way. The stock made it to resistance around $53.75, its old highs, and just failed. A move back to $47.35 doesn’t seem so crazy over the short-term. (Should be free to read- Snap’s Soaring Stock May Be About To Burn Out).
Gamestop (GME)
Not a good day for Gamestop, with the shares plunging by nearly 8% on no news. The borrow rate and the implied volatility levels have subsided some, but not enough, in my opinion. The stock failed at resistance around $22.65 twice over the past few days, not a great sign. Today the stock bounced right off support that I noted around $18.65. The big problem is that there is still a gap to fill around $15.50. It will likely get filled over the next few weeks. The RSI still has much further to g, before getting too oversold.
Nvidia (NVDA)
Nvidia is getting close to the big crack. We have been talking about $460 for a really long time. I still think it comes, and probably sooner than we think.
Ok, good night!
-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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