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August 13, 2020
STOCKS – AMZN, MU, NFLX, UBER
MACRO – SPY, QQ
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- Warning Signs
- The Message Remains Unchanged, The Market Has Limited Upside
- S&P 500 At THE Critical Moment
- Risk-On Still Under Stress
- Rotation Still In Force, Watch Tech Carefully
- AMD’s Overextended Stock Could Drop 7.5%
- For Now, Rotation Trade Is Keeping S&P 500 Afloat
Stocks were mixed today, with the S&P 500 falling 20 bps and the NASDAQ 100 rising 20 bps. But it was worse than the number let on because the NASDAQ 100 had been up by over 1% on the day, only to give it all back. Meanwhile, the S&P 500 still has that giant gap to fill from the other day.
When looking around the market place, nothing is supporting this moving higher, and I’m not referring to fundamentals. Options betting remains bearish, and there have been very few bets building for higher prices on the S&P 500. Copper was smoked today, falling by 3.3%, and below $2.80. The significant gains from the financials and industrial have vanished, and the XLK was up by just ten bps. Volume levels were low today as well. (PREMIUM CONTENT – The Message Remains Unchanged, The Market Has Limited Upside)
S&P 500 (SPY)
The SPX has been unable to push through resistance around 3,385 and is likely to fill that gap tomorrow around 3,340 or so.
Additionally, the RSI in the SPX is now rolling over, and it could suggest a change in trend is here.
Nasdaq (QQQ)
The Qs rose to resistance at $275.50 and failed to push higher, not a good sign at all. The RSI is now clearly trending lower as well, and that is a negative sign as well. 
Overall, the movement in the market seems to suggest it is completely worn out, buyers are exhausted, and a change in trend is not only coming but is likely here. I think it may be pretty much over for now. Copper is telling us the big run is over.
Junk bonds are telling us it is over.
Even gamma levels are telling us it is about over. The high strike $340 level on the SPY has hardly moved higher since August 7’s, reading at $335. Meanwhile, the Q’s haven’t seen their high gamma strike price rise above $275 since August 6. It means nobody is rolling their bets higher; it means the options market is not anticipating higher prices.
Amazon (AMZN)
Amazon failed at the downtrend today and is likely moving lower still and a date at the uptrend line around 3,000. That RSI is telling you the next major in Amazon is lower, not higher.
Netflix (NFLX)
Netflix has broken its uptrend on the chart and the RSI. The next significant level is $450.
Micron (MU)
Micron came within my margin of error, falling to $45.90. I had been looking for $45.50. (Premium content – Bets Pile Up Micron Falls As Much As 10% – FROM JULY 29)
Uber (UBER)
Uber’s chart looks flat out scary with a chance for the shares to fall to around $28.30.
See you
-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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