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1/13/21
Stocks – INTC, AMD, GM
Macro – SPY, VIX
Mike’s Reading The Markets (RTM) Premium Content – FREE 2-WEEK TRIAL
- Bank Earnings Preview – Refocusing Investors Attention
- Midday – Waiting For Movement
- Morning Note- No Noticeable Changes To Outlook
- Midday – The Equity Market Doesn’t Care About Higher Rates, For Now.
- Morning Note- Time To Feed The Ducks
- RTM Option Analysis – Zoom Faces Further Losses
- Midday – Is Something Changing?
- Morning Note – Risk Turns Off As Bitcoin Gets Crushed
- T.W.A. – Gamma Speculative Squeeze May Push Stocks Higher
Stocks rose some on January 13, but the S&P 500 has still been unable to take out Friday’s closing high. To some degree, that is surprising to me. It has been nearly three days, and what was a powerful closing level on Friday has been difficult for the index to move above.
What also concerns me is that this coming Friday is an options expiration date, and we should begin to see market makers unloading over hedged positions. The amount of options trading taking place in the market and the moves it creates in some stocks is really amazing. The open interest levels for expiration this Friday is almost on par with December’s expiration date.
Meanwhile, the VIX doesn’t go down, and perhaps the explosion in options volume has permanently shifted the structure of the implied volatility pricing. After all, with all of the options trading taking place, shouldn’t the dealer be able to make a little extra? If that is the case, then perhaps the VIX at 22 is the new 12.
What is most strange is that the VIX volatility index, VVIX, is actually diverging from the VIX. Meaning, as the VIX is falling, the VIX volatility index is rising.
Implied volatility on the S&P 500 is much higher than the historical volatility. This is a trend that typically is followed by a surging realized volatility. So, we can patiently wait for the shoe to drop. When it will drop, and what will cause it to drop, is the big mystery.
It is worth noting that the one index that continues to make new highs is the most shorted index.
Anyway, maybe we should all mark our calendars for February 9, just in case.
Intel (INTC)
Intel jumped today after it was announced that Bob Swan was stepping down as the CEO in February. The new CEO will be coming over from VMWare. Intel jumped rather noticeable, filling a technical gap from mid-July at $59.75. These CEO changes can be messy initially, so maybe the stock is getting ahead of itself here. At least, that is what the chart would indicate. Now it is going to have a gap to fill at $53.20.
AMD (AMD)
AMD didn’t like the Intel news falling by 3%. This stock seems to find a tremendous amount of support around $89.25. So that will be the level to watch. A breakdown could be a sign of a lot worse to come.
Exxon (XOM)
Exxon keeps going up, and it is in a spot where it could even rise to around $51.
Ok, that is all…
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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