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MARCH 11, 2021
STOCKS – NVDA
MACRO – QQQ
Mike’s Reading The Markets (RTM) Premium Content – FREE 2-WEEK TRIAL
- Live Session – 3.12.21 — 1 PM ET
- Midday Note: Is This It For The Rally?
- Morning Note: The ECB Strikes First, And That Means A Stronger Dollar
- Midday: Growth Stocks May Still Have Further To Fall
- Morning Note: This Is Like The Upper End Of The Range For The S&P 500
- Video: Today’s Rally Not Likely To Last
Stocks ripped higher again today; there is absolutely no reason for this performance the last three days; nothing has changed. Rates didn’t suddenly plunge; the market went from dead for sale last week, and on Monday, to all of a sudden, investors are scrambling to buy stocks.
Maybe the inline CPI reading on Tuesday morning gave the equity market the confidence that inflation isn’t going to be a topic on the bond market’s mind. The bond market certainly doesn’t reflect that view.
Tomorrow we get PPI, which is expected to come in at +2.7% y/y, so we will have to wait and see the results are, but if that number comes in north of 2.7%, the equity market might have a swift and sudden change of mind.
There is still a big appetite to short the 10-year with the overnight Repo rate still in negative territory. So either the bond market has lost its mind and is totally off base, or the equity market is in for a big shock when the 10-year rate surges higher again.
When it comes to economic or Fed-related things, should you trust the bond and currency market or trust the equity market? I would take the bond market every day of the week over the equity market.
If the prices paid index in the ISM manufacturing report is a sign of what is to come, and the PPI runs about a month behind the ISM report, perhaps we will get a PPI number north of 3% tomorrow. I guess we will find out.
Would I want to chase the equity market higher ahead of this number with the VIX at 21.9 and nowhere to go but higher? No, I would not be chasing stocks higher.
10-Year (TLT)
There appears to be a bullish flag pattern formed in the 10-year that would suggest another leg higher is coming, which could send the 10-year to around 1.7%.
NASDAQ (QQQ)
Meanwhile, we need to wonder if the exact opposite pattern has formed in the QQQ ETF, a bear flag, after struggling all day at the $319.50 level.
Nvidia (NVDA)
Nvidia rose today, making it all the way back to resistance at the $520 level. It couldn’t make it all the way through. So this might be a level that we see Nvidia reverse lower and head back to $465.
Anyway, it is late, and that’s gonna be all for tonight.
-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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