September 16, 2020

STOCKS – AAPL, TSLA, FDX, 

Macro – SPY, QQQ

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Michael Kramer and the clients of Mott Capital own Apple and Tesla

S&P 500 (SPY)

It is kind of hard to understand what is driving prices higher this morning, with most international markets either falling or trading flat. But the S&P 500 ETF is trading up 50 basis points today, recapturing some of those end of day losses yesterday. At this point, if these gains hold, we will be trading above that resistance region at 3,425, and the next significant level of resistance around 3,450. 

The morning gap highers, now, three days in a row on little to no news, is strange, and something I’m not comfortable with because, as we have seen throughout the day, those gains have seen significant givebacks. 

Whether the overnight moves are due to hedging by the market makers or over-eager traders trying to get ahead of the day in thinly trade overnight market, I do not know, but it is undoubtedly strange. 

NASDAQ 100 (QQQ)

The Qs are trading higher too, but again one should be careful here, with the ETF testing the April uptrend again and near a short-term resistance level around $282. 

Let us not forget that we get retail sales this morning, and we have the Fed decision at 2 PM. I do not know what the Fed could say that is new at this point. Perhaps moving to some language that talks about letting inflation run above an average rate of 2% for one year, before raising rates. I don’t know. We haven’t averaged 2% inflation for a decade, let alone one year. I wonder if the Fed will make mention of Asset bubbles, although it seems like something reserved more for the minutes. 

Apple (AAPL)

Apple will be necessary to watch today, as that stock seems to control the direction of the market. Currently, it is pointing to a flat opening. I continue to think this stock needs to fall further and drop towards $109 over the next few days.

Tesla (TSLA)

Tesla is trading lower some today, and there is a gap that needs to get filled around the $420 level. 

FedEx (FDX)

FedEx is trading up 10% this morning to price snot seen since September 2018. The $260 region is likely to be a challenging area for the stock, given the history there. But if it can clear it, all-time highs are within reach. I think it can get there. 

Ok, more later today. 

-Mike

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