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June 24, 2021
STOCKS – ACAD, MU, AMZN
MACRO – SPY
Mike’s Reading The Markets (RTM) Premium Content – FREE 2-WEEK TRIAL
- RTM Morning Note- S&P 500 Is Now Range-Bound
- RTM Short-Term Bullish Trade Idea- CISCO (CSCO)
- RTM – Expecting A Pullback
- RTM Short-Term Bullish Trade Idea- Comcast
- RTM Morning – Turnaround Tuesday?
- RTM Morning Note- Expect Volatility To Pick Up
- RTM Short-Term Trade Idea- Micron
- Tactical Update – Everything May Have Just Changed
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN ACAD
S&P 500 (SPY)
Stocks finished higher after a nice overnight drift session. Basically, after the S&P 500 gapped higher on the opening, nothing happened all day. The index finished up by 58 bps, to close at 4,266. There was nothing magical today, it was just flat out boring, and it seems that nothing is driving this market up without the pump of the overnight futures.
One reason why I think the S&P 500 has stalled is that earnings revisions have slowed dramatically. Meanwhile, the index itself has been trading between 20 and 21 times earnings estimates since May of last year, so unless we are about to get a lot of multiple expansion, it will take increased earnings estimates to drive equities higher. Perhaps earnings estimates pick up in pace once second-quarter results are over, but there is, of course, the big risk that estimates start to get revised lower too. (Premium Content – RTM Morning Note- S&P 500 Is Now Range-Bound)
This is the biggest reason we have just stalled for the most part and likely to be more range-bound than anything over the next month or so. It likely means the market will continue to rotate between reflation sectors and technology sectors, and back and forth, buying the dip on one and selling the rip on the other.
Inflation
Breakeven inflation rates moved lower again, back to 2.3% today. The divergence between the S&P 500 and the breakevens is fairly wide now. Perhaps the correlation is breaking down, perhaps it isn’t, but I’m not sure how much longer this can last either.
Amazon (AMZN)
Amazon was in sell the rip mode, with the stock getting to the upper end of the range at 3,500 and now moving lower, a move back to $3,350 seems possible.
Micron (MU)
Micron has rallied the past two days, and it comes to an inflection point, with the downtrend and resistance around $81. We will have to see what happens now; if it can clear the downtrend, the bearish betting I saw in the stock was wrong, and it can climb back to $86. If not, then it will probably head lower to $74. I don’t know at this point.
Acadia (ACAD)
Acadia has dipped lower for a few sessions after that big move up off the lows. I’m just hoping there is a bullish cup and handle pattern that is forming.
-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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