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STOCKS – JPM
MACRO – SPY, QQQ
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- RTM: Reversal Signs
- RTM: The Rally’s End May Be Near
- RTM: Stocks Continue To Rising On CTA Flows
- RTM: Stocks Stall As Credit Conditions Tighten, ISM Stronger
- RTM Liquidity Update: Stocks Rise In July Due To Easier Access To Margin
- Replay Of Live Session
Stocks finished the day flat, ahead of the big job report. Estimates for 230,000 new jobs to have been created in July, down from 381,000 in June. But the unemployment rate is expected to remain flat at 3.6%. But the considerable number will be the average hourly earnings, which are expected to rise 4.9% y/y versus 5.1% last month. I think that the wage number is the biggest number to watch, as a number higher than estimates could suggest upward pressures on wages.
This recent rally, has at this point retraced the entire decline from mid-June. We saw a similar type of patterns in April and May. With the entire June drop now retraced, this has typically been when the market has run into trouble.
Additionally, there is a rising wedge pattern that is present, and that would be a bearish reversal pattern. If this plays out the way previous moves have played out, then I would expect the market to give back this entire rally.
For the NASDAQ the picture is not any better, with the futures showing a clear bump and run pattern, and also what appears to be a rising wedge pattern. Like the S&P 500, I would expect the majority, if not the entire, rally to melt away.
This is not to say this shall happen or start tomorrow, I am not saying that. I am saying that when the pattern has completed. The patterns are close to being complete, but there is some more room if they choose to rise a bit further. But once the trend line on the wedge breaks I would think we would see the start of a decline.
JPMorgan may be telling us something, as the stock struggle to push above $116. It now finds itself back at support just above $110. That support level needs to hold, because if it breaks I would think that the stock retest the lows.
That’s going to be all until the weekend.
Charts used with the permission of Bloomberg Finance L.P. 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.