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June 8, 2021
STOCKS – DE, BAC, MU, INTC
MACRO – SPY, IWM
Mike’s Reading The Markets (RTM) Premium Content – FREE 2-WEEK TRIAL
- RTM – Transports And Housing On Watch
- Tactical Update: Sinking Inflation Expectations May Signal Risk-Off
- RTM: Inflationary Pressures Still Building
- AND SO IT BEGINS. PLUS A BIG BEAR BET IN BANK OF AMERICA
- Next Live Q&A Session June 4 At 1 PM ET
- RTM Morning – Zoom Not Growing Fast Enough
- RTM – Waiting On Big Economic Data
Reports Now Available On This Website: Sinking Inflation Expectations May Signal Risk-Off – 6.5.21
Stocks finished the day flat once again, with the S&P 500 up 2bps. There is a fascinating pattern forming here. Since May 27, we have managed to gap higher 6 times, with only one time leading to a higher close on June 4, jobs Friday. The rest of the time, we basically finished the day flat. It suggests that buyers have enough energy to open the market higher, but not enough to finish the job, allowing the sellers to take over. I’m just wondering at what point this pattern breaks and what the result will be.
A rising wedge pattern has formed in the S&P 500 going back to May 17, and if it has anything to say about what happens next, it seems highly likely the index breaks lower. It is, after all, a bearish technical pattern. So we will wait and see how this all goes. But a pullback to 4,190 is certainly a big possibility with more to fall after that.
Russell 2000 (IWM)
Normally I would consider the Russell 2000 rising as a bullish indicator for the broader market, but that is not the case anymore. The index has been taken over by these most shorted stocks leading the pack. Since the middle of May, it is pretty clear that the most shorted stocks are taking over. The Russell will only continue to go higher for as long the most shorted stocks continue to rise, making me call into question the quality of the rally.
Micron (MU)
Micron did not have a good day at all, volume levels spiked, and the stock moved back to support around $80. There is no sign of the downtrend in the RSI breaking yet, while the MACD appears to be getting ready to roll over as well. These are all bearish trends that suggest a move to $74 is highly likely.
Intel (INTC)
Intel saw some bullish option betting, and I noted it in this morning’s note. The stock is hovering around resistance at $57-58, and it would take a move above $58 to get it to moving higher towards $62.50. (Sign-up for Reading The Markets Subscriber Services to Read – RTM – Inflation Expectations Are Breaking, Plus A Bullish Bet On Intel)
Bank of America (BAC)
Bank of America was a stock I saw bearish options betting in last week, and now it appears it may be getting ready to break down. A drop below $42.50 would be a big problem for the shares and likely signal a decline to around $39.70. (Sign-up for Reading The Markets Subscriber Services to Read – AND SO IT BEGINS. PLUS BIG BEAR BET IN BANK OF AMERICA)
Deere (DE)
What’s going on with Deere? The stock has broken its uptrend, the RSI and MACD are trending lower, signaling lower prices to come. A break below $350 would signal a further drop to $332.
Anyway, that’s all for today.
-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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