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Supposedly, tomorrow is another opportunity for the Supreme Court to issue an opinion on tariffs. Who knows—we’ll find out around 10:00 a.m. whether an opinion is released or not. The timing is ideal for the stock market, as the S&P 500 is compressing and will soon be forced to make a decision on direction. I continue to think this looks more like a topping area for the index than the start of a “melt-up.” It could certainly be counted as an ending diagonal triangle.
Really, the main reason remains volatility, which is still very low. Today did see a sizeable jump in the left-tail index, which rose to 10.7—still a fairly low reading, but higher nonetheless. But hey, we’ll find out tomorrow, one way or another I guess.
In the meantime, rates appear to be frozen in time, with economic data—whether good or bad—having no effect on the long end of the curve. Today’s CPI report, which missed on the core, had no impact on the 30-year yield. It still looks like a bull flag, but for now, nothing is happening.
To find rates moving higher, one needs to look to Japan, where the 10-year continues to grind higher. The 10-year JGB is currently at 2.17%. Based on the wedge pattern and extending it forward, the 10-year yield could climb toward 2.25%.
USDJPY broke out today, rising above resistance at 159. For now, it appears the market cares more about Japan’s fiscal spending plans than interest-rate spreads. A move toward 162 seems increasingly likely at this point.
Software stocks were absolutely obliterated. Shares of Salesforce, ServiceNow, and Workday were smashed. In fact, ServiceNow is back at its 2021 highs, which also correspond to the April 2025 lows.
Workday actually looks even worse.
Salesforce appears to be the best of the bunch, but that isn’t saying much. I’m guessing the market thinks these businesses will be cannibalised by AI. The charts all look horrible.
Anyway, see you later.
Mike
Glossary by ChatGPT
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Bull Flag – A continuation chart pattern marked by a brief consolidation following a strong upward move, often preceding another advance.
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Ending Diagonal Triangle – An Elliott Wave pattern that typically appears near the end of a trend, signaling potential exhaustion and reversal.
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JGB (Japanese Government Bond) – A debt security issued by the Japanese government, commonly used as a benchmark for Japan’s interest rates.
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Left-Tail Index – A volatility-related metric that measures demand for downside protection, often associated with crash risk.
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USDJPY – The currency pair representing the exchange rate between the U.S. dollar and the Japanese yen.
Disclosure
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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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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