It Is A Rollercoaster!
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.
Stocks – EBAY, ZM, TSLA, AMD
Macro – SPY
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- RTM-MIDDAY: GAP FILLING ALGO'S, TRENDS LOWER
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- RTM Morning Note - The Sell-Off May Only Be Starting
- RTM Week Ahead: Stocks Return To Pre-Pandemic Valuations
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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN TSLA
Stocks fell sharply to start the day on December 21 but managed to stage a fairly sizeable rally. The volatility in the market is not all that surprising, given it followed quadruple witching. The storming back of the market wasn't surprising either, given it has been the mantra of the market since March. But really, the rally may have been more about the mechanics and the algo's working overtime to fill the technical gap that was created by today's steep sell-off at the open.
S&P 500 (SPY)
Overall, the S&P 500 fell by roughly 40bps and was down nearly 2% at one point. It found firm support at 3,637, and just rallied back, and nearly filled the gap, but didn't have enough in the tank to finish it off.
An increase to 3,710 would not be surprising, which would complete the gap fill. But whether that happens or not may not matter. I would tend to think that there is further to fall in this leg. Again, there are plenty of open gaps below, with the next at 3,620 and then 3,580.
The COVID variant news in the UK was not "new" news; it has been circulating since the middle of last week. We have been following it regularly. It makes for a great headline, of course, but that is about all.
The same thing happened today in the VIX index.
Tesla did trade lower today following its S&P 500 inclusion, falling by nearly 6%. The stock did manage to hold on to support at $650. The RSI is starting to diverge lower, and I am beginning to think the big run up may have peaked for now. We will see tomorrow if there is follow-through, but a break of $650 sends it lower to $575
AMD fell today, and closed right on the uptrend, and is too close to call. But there was some bearish betting I picked up on at the $100 strike price, which makes me think this is one that will finally break and head towards $87. (premium content - RTM Options Analysis - AMD Seeing Bearish Betting)
Zoom may turn higher over the short-term here, before resuming it downward ways. The RSI is starting to move up; meanwhile, the stock is moving above resistance around $408. I think it has a window of opportunity short-term to fill the gap at $476.
eBay has been trending lower since July and filled a gap at $53.90. For now, I think it will continue lower towards its 200-day moving average at $48.
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