Asset Classes

Free investment financial education

Language

Multilingual content from IBKR

Close Navigation
Learn more about IBKR accounts
Stock’s Celebrate The Fed Taper, Racing To New Highs, Yep

Stock’s Celebrate The Fed Taper, Racing To New Highs, Yep

Posted November 3, 2021 at 11:32 pm
Michael Kramer
Mott Capital Management

Stocks – AMZN, ROKU, DIS

Macro – SPY

Today, stocks were over the moon that the Fed tapered but didn’t talk about a rate tightening cycle. I didn’t even see anything new in this announcement or press conference. It was kind of boring, to be honest.

The Fed futures were undoubtedly not moved by today’s statement. Yields rose across the curve, with the longer-dated yields rising the most, steepening the curve, while the dollar weakened.

My view hasn’t changed as a result of this meeting. I still think we will see the yield curve flatten and the dollar rise, thus tightening financial conditions over time, which will act as a headwind to stocks.

The big thing, though, is the stalling growth that appears to be occurring globally and most notably in China. Iron-ore prices have plunged, and now copper prices are falling too. The Baltic dry index fell by more than 9% today and is below 3,000. Meanwhile, oil prices have stalled and now heading lower as supplies are building. At some point, this should click with the market, that the Fed is tapering into a global growth slowdown.

S&P 500 (SPY)

Currently, the S&P 500 is facing the October 2020 trend line, which broke back at the beginning of September. If the index can get through that resistance which is currently at 4,660, then there is a good chance we move up to the 4,750 to 4,800. If the index cannot get beyond 4,660, then I would think this rally is over, as a failure would signify a retest of the break in the uptrend. It would likely result in the September/October lows being taken out. The RSI on the S&P 500 is now at 73.50, which is high and tells us the market is overbought.

S&P 500

Roku (ROKU)

Roku is plunging tonight, nearly 10%, after guiding revenue for the next quarter below expectations. Oh well. A break of $287 will send the shares on their way lower to $228. Probably not a great read-through for another overvalued/overhyped stock, The Trade Desk.

Roku

Amazon (AMZN)

Amazon was up today, and it looks like it will try to refill the gap around $3440. I still think this stock is dead money for the foreseeable future.

Amazon

Disney (DIS)

Disney will be reporting results soon, and the chart doesn’t look the strongest, with a descending triangle pattern forming and a giant gap to fill at $154.

Disney

Originally Posted on November 3, 2021 – Stock’s Celebrate The Fed Taper, Racing To New Highs, Yep

Disclosure: Mott Capital Management

Mott Capital Management is the portfolio manager for one portfolio offered by Interactive Advisors. Interactive Advisors clients do not invest directly with the Portfolio Managers like Mott Capital Management, and the Managers do not have discretionary trading authority over Interactive Advisors client accounts. The Portfolio Managers on the Interactive Advisors platform simply license their trade data to Interactive Advisors, which then allows its clients to have the same strategy and trading decisions mirrored in their accounts if the Portfolio is in line with their risk score. Portfolio Managers like Mott Capital Management implement their trading philosophy and strategy without knowing the identity of Interactive Advisors’ clients or taking into account these clients’ individualized circumstances.

Mott Capital Management has entered into a Portfolio Manager License Agreement with Interactive Advisors pursuant to which it provides trading data IA uses to offer a portfolio to its investment advisory clients.  Mott Capital Management is not affiliated with any entities in the Interactive Brokers Group.  

Interactive Advisors is an affiliate of Interactive Brokers LLC.

Pursuant to the Investment Management Agreement between Interactive Advisors and its clients, all brokerage transactions occur through Interactive Brokers LLC, an affiliate of Interactive Advisors. The use of an affiliate for brokerage services represents a potential conflict of interest as Interactive Brokers LLC is paid a commission on trades executed on behalf of Interactive Advisors. Interactive Brokers LLC does not consider this conflict material as it does not sell, solicit, recommend, trade against or otherwise attempt to induce Interactive Advisors to place any orders in any products. Interactive Advisors does not offer services through any other broker-dealer.  All trading by Interactive Advisors is self-directed. Interactive Advisors clients acknowledge this potential conflict of interest and authorize Interactive Advisors to execute transactions through Interactive Brokers LLC when they open an Interactive Advisors account. Clients should consider the commissions and other expenses, execution, clearance, and settlement capabilities of Interactive Brokers LLC as a factor in their decision to invest in an Interactive Advisors Portfolio. Interactive Advisors believes it satisfies its best execution obligation by trading its clients’ trades through Interactive Brokers LLC. While there can be no assurance that it will in fact achieve best execution, Interactive Advisors does periodically monitor the execution quality of transactions to ensure that clients receive the best overall trade execution pursuant to regulatory requirements.

Disclosure: Interactive Brokers

Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Mott Capital Management and is being posted with its permission. The views expressed in this material are solely those of the author and/or Mott Capital Management and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

Disclosure: Futures Trading

Futures are not suitable for all investors. The amount you may lose may be greater than your initial investment. Before trading futures, please read the CFTC Risk Disclosure. A copy and additional information are available at ibkr.com.

IBKR Campus Newsletters

This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.