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September 11, 2020
STOCKS – TWLO, AMD, ZM
Macro – SPY, QQQ,
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MICHAEL KRAMER OWNS QQQ PUTS
It seems hard to believe that 19 years have passed since this sad day so long ago. I remember it vividly. I can remember walking out of the subway that morning thinking about how beautiful a day it was, and wishing I could be at the beach. That turned out to be the best memory of the day.
S&P 500 (SPY)
Stocks are rebounding today after yesterday’s late-day meltdown. The S&P 500 ETF is currently up around 90 bps, and the immediate level of resistance I would look for a turn lower would come around $340, then, of course, around $342.25.
Even if we manage to close higher, I don’t think it changes much in terms of what has taken place and the damage that has been done. I would be shocked if we closed above $342.25.
NASDAQ 100 (QQQ)
The Qs are rising and testing resistance around $275, followed by resistance at $278.
I think these rallies should be treated as suspect, with a gap higher at the open and strong potential for a gap fill low throughout the day. In the past few sessions, the buyers have been run over, and call volumes have been unable to return to their peaks. It tells me that the same buying enthusiasm is not there. We will see, but today is Friday, and Fridays have been intense days because people are trained to believe there will be some positive news dump from the vaccine fairy on Sunday night or early Monday. At this point, I think the positive vaccine news has been priced into the market, and the greater risk is that of disappoint.
I’m also surprised the market is giving a pass to congress for not getting a bill down. In fact, the longer it goes without a bill, the more unlikely I think a bill will come. The third quarter Atlanta Fed GDPNow is tracking a growth rate of 30.8% for the third quarter, which is about 7.7% q/q. It would leave us down just 3.3% on the year, far better than anyone expected, certainly better than I expected. It actually goes in favor of the Republicans and the President NOT to do a bill
If another bill doesn’t come, one can expect yields to rise and the dollar to strengthen, which will not be good for risk assets overall. So at this point, one could argue, there is more negative headline risk at this point than positive.
Be careful today. It s not the same market you have grown to love over the past six months; something has changed. The breaking of those trend lines tells you that.
Zoom (ZM)
Let’s see if Zoom can get past $394 today, or fails. If it fails, which I think it will, it is likely to head down $325.
Twilio (TWLO)
Twilio should find tough resistance around $975, with a drop below $910, sending the shares to $853.
AMD (AMD)
Maybe today will be the day AMD finally breaks $78 and starts it descent to $72.
Have a good one
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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