August 12 – Stock mentions SPY, SLV, MUWealth Strength IndexMU is Moderately Flat and trending Up, UBER, C, NFLXWealth Strength IndexNFLX is Extremely Down and trending Down
Michael Kramer and the clients of Mott Capital own Netflix
Who’s Having Fun?
Stocks had another lackluster day as the summer rolls on with the S&P 500 falling by about 1.25%. Not a good day, but these 1% days have become all too commonplace. There are plenty of things to point for today’s sell-off from the HK protesters to falling yields. Another was the weak new yuan loans in China, another sign that China continues to struggle.
Don’t Fear It
As I mentioned in a video today to subscribers, it isn’t about the 10-2 year yields inverting; it is about the depth and duration of the inversion. That inversion can not only last months but years. So lets not freak out yet, because if the yield curve does invert, it still has much further to go.
Fed Fund Futures
If there is one saving grace here, it is that the market is pricing in more Fed rate, and that could help to steepen the curve slightly. Currently, the Fed fund futures are projecting a fed funds rates of less than 1.5% by January.
S&P 500 (SPY)
The S&P 500 found support today at 2,872 and then formed a descending wedge, a bullish reversal pattern. It would suggest that the recent downtrend reverse higher, towards 2,915 over the short-term.
Micron jumped today after the CEO made some positive comments at an industry conference. It appears to have broken out of a downtrend and is heading back to $44.
The SLV is not something we cover often, but I have noticed a lot of call buying in the SLV ETF the last day or so. The technical chart is starting to look bullish, as it approaches resistance at $16.50.
Uber continues to get clocked, and I will admit, it makes me just a little bit happy to see it go down. Especially following the lashing, I took from the peanut gallery last week following my negative article.
Well, an inverted yield curve won’t be good for the bank stocks, and that is one reason why C is likely going back to $61.
Netflix had a pretty solid day; maybe it is the start of that push back to $321.
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