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12.9.20
Stocks – AMD, DOCU, ZM, NVDA, SNOW
Macro – SPY,
Mike’s Reading The Markets (RTM) Premium Content – NOW WITH A 2 WEEK FREE TRIAL
- Stocks Turn Lower, More To Come?
- Streaming Media War Rant – Morning 12.9.20
- A Potential Headfake
- The Snowflake Convexity Squeeze
- Stocks Set To Drop On 12/8
- Can AMD’s Bloated Valuation Get Even Bigger?
- A Correction May Be Imminent
- We Should Start Our Next Move Thursday
- These Things Tend To End When Least Expected – Week Of December 7
Stocks fell on the day, with the S&P 500 finishing lower by 82 basis points and the NASDAQ 100 (QQQ) falling by 2.26%. From a news standpoint, there was nothing. From a momentum standpoint, it seems that some of that convexity squeezing in some names popped today, and that led to stocks falling. As call values in options collapse, options dealers need to unwind some of their hedges. Selling begets more selling. So we had some pretty violent moves in the overvalued group of names.
S&P 500 (SPY)
The S&P 500 is now clearly below its uptrend and below support 3680. The trend in the S&P 500 may have shifted, and we will need to be on alert for a further drop. Again, this is not a surprise nor unexpected. The only question is how steep it gets; I could argue for a drop back to around 3,200.
10-Year
Surprisingly yields rose today, with the 10-year edging up around 2 bps to 94 basis points. The trend remains higher for the time, and I expect it to move back over 1%.
Small-caps still have a long way to go until they catch up to the Nasdaq 100 names. It could be variable, but there is no doubting, a catch-up trade is in place.
Zoom (ZM)
No surprise Zoom was crushed today. The trend is lower, and support at $400 broke early. It is hanging on to support at $386; a break there sends it lower to $367. I still think it goes back to $325.
DocuSign (DOCU)
DocuSign had a rough day and managed to find support around its 50-day moving. I don’t expect that to last, as it hasn’t been anything meaningful in the past. All the trends still point lower.
Snowflake (SNOW)
Snowflake was crushed, dropping below support at $375, as that price now becomes resistance. The convexity squeeze is over; lower prices probably lie ahead. (premium content – The Snowflake Convexity Squeeze)
AMD (AMD)
AMD fell below $90 today after failing AGAIN at $94, with the next level of support coming at $87.
Nvidia (NVDA)
Nvidia fell below the uptrend today, and I think this sets up a drop to around $460 that we have been waiting for.
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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