Dead Cat Bounce
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.
12/2/21
Stocks – GS, MSFT
Macro – SPY, QQQ, VIX
- RTM- Snapback From Oversold
- RTM: The Fed Is Tapering Into Slowing Growth Narrative Has Arrived
- RTM- Taper Still On And Is Not Going To Sit Well With Stocks
- RTM- Replay Of Live Session
- RTM: Implied Volality Push Higher
- RTM: Financial Conditions Appear To Be Tightening And That’s Bad For Stocks
- RTM: Rates May Now Rise Faster, Sooner
- Tactical Update: It Is Now A Matter Of When The Market Corrects, Not If The Market Correct
- RTM- Risk-Off On OPEX
- RTM Exclusive: Its To Time Buckle-UP
MICHAEL KRAMER OWNS SPY PUTS
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN MSFT
YouTube Video From 12/2/21
Volatility Will Surge As The Markets Re-Price For A Faster Fed Taper
Stocks continued to whip around, with the S&P 500 finishing the day higher by 1.42%. Essentially, the market has gone nowhere since Tuesday. A lot of things could change following the BLS job report tomorrow morning. Based on initial jobless claims, I'd be shocked if the payroll number missed the estimates for 550,000.
But for today, the market just snapped back from some oversold conditions, and I don't see much else here. The S&P 500 has done nothing despite having massive trading ranges the past two days. I don't think that will change much tomorrow, with plenty more volatility.
S&P 500 (SPY)
There appears to have been a bear flag that formed in the S&P 500 today, and the index broke through the uptrend of that flag around 3 PM and then retested the trend line again right before the close. That could result in a move back down to 4550 tomorrow. If we break 4500, things could quickly become dicey, as many open gaps do not conclude 4,370. There is a huge gap that still needs to be up at 4,700.
NASDAQ (QQQ)
Also, there is a sort of a pennant pattern in the Qs. I wouldn't say I like the chart's look, with the opportunity for a Head And Shoulders pattern and that monster gap down at $360 that needs to be filled.
VIX
Meanwhile, the VIX came down some today, which led to a significant boost in the market. But I'm not sure that VIX will keep coming down, especially if we keep seeing rates rise. The VIX is strongly correlated to bond ratios, and when ratios and spreads are getting large, the VIX tends to go higher.
Goldman (GS)
Goldman had a strong day rising 2.9%, but it has that whole double top thing going on with it, and sitting on support at $375 makes this one vulnerable to a big turn lower.
Microsoft (MSFT)
Microsoft doesn't have the most fantastic look at this point, and it also has a big gap that needs to fill down around $310.
That's all I have for today.
Mike
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