August 6, 2020

Stocks  – UBER, NFLX, AAPL, FB

Macro – SPY,

Mike’s Reading The Markets (RTM) Premium Content – NOW WITH A 2 WEEK FREE TRIAL 

• A Long-Term Chart Of The Nasdaq Worth Seeing – Midday
• Morning Call – Transcript
• There Are Too Many Stars Aligning- Morning Call
• The Mother Of Bull Bets?
• Beware – Morning 7.31.20
• The Four Horsemen Ride Tonight
• Yields Are Cracking On Bad Jobs Data
• Fed Paints A Gloomy Outlook
• Bets Pile Up Micron Falls As Much As 10%

MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL

Stocks moved higher today, and like I have pointed out, from here forward, we either have much higher to go or a significant pullback. In an SA story, I noted the continued bearish betting taking place in the market. This betting has been consistent for weeks; now, these guys may be hedging or flat out wrong. Sure, anything is possible, and that would mean I am picking up on the wrong signals. But again, when I see trades of this size, this consistent, it makes me think the options guys are on to something, or in some cases, know something.

There is a big difference in options and equities, and that is something newer investors simple do not appreciate, which is the risk and leverage, and of course, options are a zero-sum game. Options give trader incredible amounts of leverage, with massive levels of risk, and to the ability to see their money go to zero. Who knows… 

Technically, again, if there was a place in time where the S&P 500 could reverse lower, as I said this morning, this is the place it would happen. It isn’t an exact science, but somewhere around this 3,340 region with some give and take would be the area I’d think that pullback would happen.

There is a clear rising wedge in the chart and the gap from February 24, which is now filled. Again, if I had to pick the perfect place for a reversal, coupled with the options betting and pricey market valuation, this would be the place for it to happen.

Technology (XLK)

The XLK is flashing a pullback signal of its own, hitting the upper end of its trading channel, along with an RSI at about 71. 

Uber (UBER)

Uber looks like a disaster on so many levels. How does a company lose $1.8 billion? How is this stock not down even more? I don’t understand. Wait, Wait. I know. I’m sure somewhere in the world, they are showing signs of improving trends. 

The stock needs to stay above $32.90 to avoid a deeper pullback.

Netflix (NFLX)

Another thing I didn’t understand was why the stay at home stocks rose today, even though the travel stocks got a bid after the state department lifted travel restrictions. American Airlines rose by almost 4% today on the news. So if more people are going to be traveling again, they won’t be at home watching Netflix? Right. Still, Netflix rose by 1.4%. Netflix hugs the uptrend. 

Facebook (FB)

Why was Facebook up 6%?  What did I miss there?

Apple (AAPL)

Apple may not stop rising until it gets to $480, hey, why not. 

Have a great one. Tomorrow is jobs Friday; I wonder what that’s going to be like. Probably as clear as mud.

-Mike

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