February 23, 2021
STOCKS – ROKU, AMD, AAPL, ADBE
MACRO – SPYMike’s Reading The Markets (RTM) Premium Content – FREE 2-WEEK TRIAL
- Bear Case: S&P 500 2,860
- Midday: Stocks Bounce, But Yields Remain Unphased
- Morning Note: The Repricing Continues
- Midday Day: Stocks May Not Be Able to Handle What Comes Next
- Morning Note: Yields Continue To Pressure Stocks
- T.W.A – Are The Bears Back?
- NVIDIA: Covered Call Strategy Ahead Of Results
- 2.19.21 Chatboard And Live Stream Replay
- Midday – Rates Are Breaking Out
- MORNING NOTE: BUCKLE UP, THINGS MAY GET MORE VOLATILE AFTER TODAY
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL
A pretty crazy day for stocks, with the S&P 500 finishing 3,880, up 13 bps, but had been down as much as 2% at one point. The sell-off came at the opening, with the big, slow grind higher over the balance of the day. This has been the pattern we have seen for a few days.
The trend of lower highs and lower lows continues. The S&P 500 made it all the way back to the downtrend, but that is where it is stopped.
The index tested the 3,800, basically within 20 points of my 3,780 target. But until the downtrend is broken, we have to stick with the lower trend, and I think we are likely to see a retest of those lower prices,d around 3,800.
The other problem is that rates went nowhere during the mini sell-off. They have been stuck around 1.35%, and based on the technicals, the 10-year looks ready to take its next leg higher to around 1.51%.
So, in reality, nothing dramatically today, despite the massive rebound Intraday. Next week may prove to be more problematic, with the ISM reports all due out. That could add extra pressure to inflation worries.
It tells me overall; the markets are not out of the woods just yet.
Additionally, some of you might find this chart interesting. From the March to the February highs, the 61.8% retracement level comes around 2,860. If you look, you will also see that is where a giant gap from April lives. It could be merely a coincidence, or it may be telling us something else. I go over this and much more in a video session today for Reading The Markets on SA marketplace; you can sign up for your free 2-week trial. Bear Case: S&P 500 2,860.
Apple did not have a great day, and although it seems like the stock mounted this epic comeback, all it did was fill the morning gap. That is not a bullish indication. In fact, it likely suggests that the selling continues tomorrow.
AMD also saw similar price action today, and again, I think this signals a bearish indication, with a likely retest of the $80 level.
Adobe made it back to $506 recently and failed to advance. The stock test a key level of support today at $450. A break of support would likely signal a long drop to around $415.
Roku fell sharply today, but more importantly, it broke that big uptrend that started in November. It could signal the end of the rally in the stock. The stock couldn't rally after results and trades for a ridiculous multiple on several cases. You can read more in this free article, but 35% is a possibility for this one. (Should be free to read - Roku: The Party May Finally Be Over)
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.