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August 9, 2021
STOCKS – AAPL, NVDA, MRNA
MACRO – SPY, RSP, OIL
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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL
Stocks had a boring day on the surface; beneath, a rotating undercurrent seemed to be concentrated towards the commodity side of things. Overall, declining stocks led advancers, resulting in the number of stocks above their 50-day moving average in the S&P 500 to slip and put downward pressure on the equal weight RSP ETF.
Equal Weight S&P 500 (RSP)
The RSP made a new high last week, but I still consider it range-bound. I have often seen stocks or indexes break to new highs and then a few days later break the other way. I still tend to think the RSP is in a precarious position, with a big uptrend in play. Plus, it looks like the MACD has or is close to an apex here and ready to turn lower.
S&P 500 (SPY)
Meanwhile, the tranquility of the past few days is about to end, I think. There is a rising wedge pattern that has formed in the S&P 500 cash and futures market. Additionally, this appears to be the end of a Wave 5 higher, equal to 78% of Wave 3. Once the futures break below 4400, we should confirm that wave 5 is complete and a corrective wave is coming.
Oil
Oil was down sharply today, falling to $66.75 by day’s end. It was as low as $65.10-ish, testing a low from previous days. While a double bottom may be in place, I think it is unlikely. Oil hasn’t even hit oversold levels yet, and I expect the dollar to strengthen further. So, could we see a pause in the sell-off? Yes. Is it the end of the move lower? Probably not.
Nvidia (NVDA)
If you are an Nvidia bull, then you better hope the stock rallies over $210 very soon. If it doesn’t and starts making its way towards $180, the odds of a double-top pattern will increase dramatically, which will signal a much steeper decline is coming.
Apple (AAPL)
Apple has a triangle pattern forming, too; I don’t think it is a bullish pattern. Apple already broke the downtrend, and we know that when the RSI gets above 80, the stock tends to not do well in the weeks that follow. A break below $145 will be a real negative for the shares, with the trendline at $130 the next likely stop.
Moderna (MRNA)
Moderna appears to be in the middle of a giant gamma squeeze. We can tell because call option volume and implied volatility have exploded higher, while skew has collapsed. This means this the run higher is like playing with fire.
Until tomorrow
Mike
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.
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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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