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MARCH 8, 2021
STOCKS – ACAD, ROKU, NVDA, DIS
MACRO – SPY, XLE
Mike’s Reading The Markets (RTM) Premium Content – FREE 2-WEEK TRIAL
- Video: The Fundamentals Of The Stock Market Have Changed
- Midday – Today’s Rally Isn’t Likely To Hold
- Morning Note: The Dollar Will Add To Pressure On Risk Asset
- T.W.A – Trouble Lies Beneath The Surface
- The Fed Is Likely To Remain On Hold At Its March Meeting
- Live Stream Will Start At 1:10 PM ET
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN ACAD
It was a rough day for stocks, especially technology stocks. They continue to get hammered as rates push higher. Now, the dollar is starting to strengthening as well, and that could further complicate the situation.
The 10-year TIP had a monster move today, rising by almost 14 bps, to finish at -61 bps. The TIP still has a lot of ground to cover before making up for its lack of participation since the beginning of August. Since August 1, the 10-Year Treasury is up more than 100 bps, while the 10-Year TIP is around 40.
Nasdaq (QQQ)
The Qs gave back all of Friday’s gains and finished not far from Friday lows. The level at $297 is a significant support region. If that level of support snaps, I think there is a good chance the index will look to fill the gap around $274, about 8% lower, a total of 19% off the high.
S&P 500 (SPY)
The S&P 500 has escaped much of the damage because it is more diversified. But if the dollar starts to move higher, it will negatively impact industrials, energy, and materials. If those sectors go, it will be tough for the S&P 500 to maintain its current levels.
If I counted out this pattern correctly, which to this point has been working, then I think we will revisit Thursday’s lows around 3720, with an increased chance for a push to 3,650.
Dollar
Again, a lot of this will be determined by what happens with the dollar, but given the huge move in yields, I don’t see how the dollar doesn’t push higher. The DXY has already broken out and is likely heading to around $93.70.
Energy ETF (XLE)
The energy XLE ETF has officially closed the gap from February of 2020. Typically, once a gap is filled, a stock or index returns to the previous trend. If that is the case, then we should expect to see the XLE trade lower.
Disney (DIS)
Disney had a monster move higher today, but the stock appears to start to show a sign of a turn. The RSI for the stock has been trending lower, suggesting a loss of momentum in the stock, while the pattern appears forming appears to be a rising wedge.
Acadia (ACAD)
Acadia had disappointing news tonight regarding its application for Dementia-related psychosis. Just very strange, as analysts on the call seem just as baffled as to the company and as for me as well. I guess if all gaps get filled then the stock should find support at $24.
Nvidia (NVDA)
Nvidia sank today by nearly 7%, closing around $465. The region around $455 to $460 is a pretty big support for the company, and the next level is $425.
Roku (ROKU)
Roku also fell hard today and is nearing support around $318. A break of support likely sets up a further drop to around $275.
Have a great day.
-Mike
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Friday’sthe sixth day of the week; the fifth working dayMore (Definitions, Synonyms, Translation)
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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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