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August 17, 2020
STOCKS – 700, ACAD, ILMN, REGN, UBER, FDX
MACRO – SPY, XBI, XLU
Mike’s Reading The Markets (RTM) Premium Content – NOW WITH A 2 WEEK FREE TRIAL
- Inflation Does Not Appear To Pose A Threat Anytime Soon
- Risk-On Trade Remains In Focus The Week Of August 17
- 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 ACAD
MICHAEL KRAMER OWNS XBI PUTS
Stocks are mixed this morning with the SPY ETF rising by ten bps and the QQQ ETF increasing by 45 bps. It follows what a relatively quiet overnight session around the world is. Hong Kong traded higher by about 1%, while Japan traded down by 83 bps, and Germany is up by 18 bps. Yields are moving down some to just below 70 bps, while the dollar index is down by ten bps to 93.
Tencent
Despite the strength in Asia, Tencent finished the day flat, again an indication that this technology trade is still struggling. The stock has managed to hold on to the 500 HKD level, which is essential. Again, this stock has served mainly as a proxy for the status of the technology trade here in the US.
S&P 500 (SPY)
We will find out today if the S&P 500 can fill the gap from last week around 3,340. Ideally, you want the gap to get filled because the market can move forward, whether it be higher or lower. Gaps generally get filled at some point, and the sooner it gets filled, the better.
Acadia (ACAD)
We will keep an eye on Acadia, as the stock continues to struggle, and needs to hold this $39 level to avoid a decline back to $31.
FedEx (FDX)
FedEx can remain on watch as it challenges resistance at $209. A break out sets up a rise towards $235.
UBER (UBER)
Uber has been holding on to support at $30, and that is a massive level for the stock that must hold. A decline below $30 triggers a sell-off to $28.30.
Regeneron (REGN)
The big biotechs broke their uptrend, and now they are at levels that must hold. Regeneron is now sitting on support near $595. A break of this level sets up a further decline to $575.
Illumina (ILMN)
Meanwhile, Illumina is sitting on support near $336, with the potential to fall back to $315 should that level break.
Risk-on/Risk-off
The reason I bring these up is that biotech is a crucial risk-on trade, and represents what I think is the riskiest part of the equity market. The chart below, we have been tracking in the Reading The Market subscriber area, which is the XLU relative to the XBI. If the risk-on trade is going to switch to risk-off, this would be the spot. (premium content – Risk-On Trade Remains In Focus The Week Of August 17).
-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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