This One Was Different
Growth, Long/Short Equity, Momentum, Macro
Seeking Alpha Analyst Since 2014
I am Michael Kramer, the founder of Mott Capital Management and creator of Reading The Markets, an SA Marketplace service. I focus on long-only macro themes and trends, look for long-term thematic growth investments, and use options data to find unusual activity.
I use my over 25 years of experience as a buy-side trader, analyst, and portfolio manager, to explain the twists and turns of the stock market and where it may be heading next. Additionally, I use data from top vendors to formulate my analysis, including sell-side analyst estimates and research, newsfeeds, in-depth options data, and gamma levels.
September 21, 2020
STOCKS – AAPL, FCX, ROKU
Macro – SPY, GLD, UUP
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- This Is A Different Sell-Off
- The Market Has Little To Support It
- The Second Leg Lower - Morning
- 10 THEMES FOR THE WEEK OF SEPTEMBER 21
- Nvidia May Drop 15% More
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10 Monster Themes For The Week of September 21
Stocks fell sharply with the S&P 500 finishing the day lower by around 1.2%. It had been much worse, with the index down well over 2%. The index fell below crucial support around 3,260-3,270 while managing to reclaim that level by days end.
S&P 500 (SPY)
I'm not sure that much changed though overall in the general direction of the market, which continues to be lower. It is entirely possible that we even see the S&P 500 climb back to 3,340 over the next couple of days, to close the gap from this morning sharp drop. It wouldn't change anything.
The market has nothing to support underneath now that momentum is broken. (Premium Video - 1st 2-weeks are FREE to try - The Market Has Little To Support It)
Today's sell-off did have a different tone, with the financials, industrials, and materials falling the hardest with the three sectors down between 2 and 3%. The sell-off today seemed to be driven more by the dollar than anything else. The dollar rallied somewhat sharply and managed to puncture through that challenging region of resistance 93.50. I talked about this in the mid-day update today. (Premium content - Get The 1st 2-Weeks Free - This Is A Different Sell-Off)
A stronger dollar may continue to hurt this group, especially those multi-nationally that export aboard, thus reducing revenue and earnings forecasts. Additionally, we know the damage a stronger dollar can do to the commodity trade.
It is why gold broke today, falling below support at $1,925, which will now act as resistance.
Meanwhile, it is also one reason why Freeport McMoran could be heading lower and back to $12.70, with a drop below $14.90.
Apple bounced back today, but notice where it failed at resistance around $110.
Roku went up 18% today because it finally got a deal to put Peacock on its streaming player. I don't see how Peacock adds up to an 18% move in the stock; it seems kind of crazy to me. I wonder how much extra revenue Peacock will bring in for service that has no charge and runs ads? I guess the premium version doesn't have ads, but still. Anyway, the stock shot up to an all-time high and probably has a bit more to go, since it technically isn't overbought yet. Maybe I'm missing something here.
Have a good one!Mike
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