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June 15, 2021
STOCKS – NONE
MACRO – SPY, QQQ
Mike’s Reading The Markets (RTM) Premium Content – FREE 2-WEEK TRIAL
- RTM – Reflation Trade To Come Under Pressure After FOMC
- The Live Session Will Be On June 18 At 1pm
- RTM- Rates Are Unlikely To Rise Thanks To The ECB
- Tactical Update: The Second Half Of 2021 Just Became A Stock Picker’s Market
- Adding Splunk To The Portfolio
- RTM Inflation Has Likely Peaked
- RTM: Inflation Expectations Are Sending Negative Growth Signal – MU Big Bear Bets
- RTM – Transports And Housing On Watch
- Tactical Update: Sinking Inflation Expectations May Signal Risk-Off
- RTM: Inflationary Pressures Still Building
Today there was carnage in the reflation trade, no surprise, right? We have been talking about this for some time, and we knew this would happen. All the signs were there. Meanwhile, technology outperformed, not sure about this lasting past tomorrow, to be honest. Tomorrow is Quadruple witching, and it likely had a very, very heavy hand in today’s technology rally. After all, something had to perform to hold the S&P 500 at the big gamma level of 4,220. Notice the 4,221 close; that’s not by chance.
But the big problem is that a ton of that gamma will disappear on tomorrow’s opening because index options and futures expire at the open. That means forces of gravity holding the S&P 500 at 4,220 disappear. Depending on how those Put and Calls options are hedged, it could mean the amount of volatility we see in the market picks up dramatically.
If not for the rally in technology today, it would have been a blood bath, with the Dow Jones Transports down 2.1%, the XLF down 2.96%, the XLE down 3.4%, the XLB down 2.2%, and so on. The NASDAQ Composite was up about 90 bps, but did you see where it closed? 14,161. So no record close, no breakout.
Somehow, the number of stocks in the composite above their 50-day moving average actually fell. Very odd, tells me not all stocks participated.
S&P 500 (SPY)
Meanwhile, the Advance/Decline on the S&P 500 fell for the fifth day in a row, while the RSI and MACD continue to weaken.
Perhaps the technology sector keeps rising; given their forecasted growth rates for next year, it doesn’t seem likely.
-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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