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12/22/21
STOCKS – TSLA
MACRO – SPY, QQQ, VIX, SKEW
- RTM: Volatility Is Likely To Remain Elevated
- RTM: What Comes Next
- RTM Exclusive: Block, Formerly Square, May Have Further To Fall
- RTM: Closer To The Beginning, Then The End?
- RTM: Volatility May Really Ramp Up The Week Of December 20
- Ford’s Stock Is Ready To Break Much Lower
Michael kramer and the clients of mott capital own tsla
The S&P 500 finished the day higher, and it is frustrating because the index is trading based on the options market, and the VIX expiration today once again. I get the feeling it is going to be like this the rest of the year with just big price swings driven by the VIX rising and falling and options guys playing games.
The chart below is pretty self-explanatory and easy to trace out the relationship.
If the intention is to continue to sell volatility into year-end, nothing will stand in the way of the market rising and giving everyone their end-of-year melt-up. If volatility is too low to sell, then the S&P 500 will stall out like the four times it has gotten to the 4700 prior. There is zero that is magical about the rally. The SKEW index moved up again, confirming today’s Vanna rally. The fundamental backdrop continues to deteriorate as NASDAQ earnings estimates continue to drop.
And remember volatility works both ways, so just because the VIX is falling doesn’t mean volatility has subsided. A 2% drop followed by a 2% rise is still volatility.
The fundamental backdrop continues to deteriorate as NASDAQ earnings estimates for 2022 continue to drop.
Tesla (TSLA)
Tesla rallied sharply today and filled the gap at $1016 after Elon Musk noted that he had sold enough shares to reach his 10% target. But then, after the close today, he clarified that statement and said now that he is almost done selling. Welcome to my world over the last seven years, being a shareholder in this stock. I’d be cautious of the stock reversing lower and filling the gap at $937.
That’s it.
-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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