Asset Classes

Free investment financial education

Language

Multilingual content from IBKR

Close Navigation
Learn more about IBKR accounts
Stocks Rise On October 27 As Turnaround Tuesday Finally Shows Up

Stocks Rise On October 27 As Turnaround Tuesday Finally Shows Up

Posted October 27, 2021 at 12:10 am
Michael Kramer
Mott Capital Management

Stocks – AMD, GOOGL, FB

Macro – SPY, QQQ, DOLLAR, RATES

MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN GOOGL

It was a wild turnaround Tuesday, with the S&P 500 opening sharply higher to finish the day up just 18 bps. The index managed to trade up to 4,598 and then turned lower, briefly turning negative in the morning session. The equal-weight S&P 500 ETF (RSP) was actually down 20 bps.

S&P 500 (SPY)

I will give this one more attempt before I go back to technical analysis school, as noted at some point late last night on Twitter. There is a rising wedge pattern on the S&P 500 futures and cash markets. Additionally, we seemed to have found resistance at the 1.618% extension from the October 13 low. Now today’s high would be an ideal place for a “B wave” top. We will have our answer tomorrow, one way or another. If this turns out to be a peak, then I am looking for a move back into the mid-4400 to start.

S&P 500 Futures

NASDAQ (QQQ)

Meanwhile, the Qs got to within pennies of its all-time and couldn’t hold it, finishing higher by 31 bps.

Nasdaq

Yield Curve

The yield curve continues to flatten, and it is now dangerously close to a big break lower on the 30-2’s. Now the economic data is picking up dramatically starting tomorrow, and any one of those data points could spark a move lower in this curve. It would come at the hands of the short-end rising and long-end staying unchanged or falling.

Yield Curve

Dollar

With an ECB meeting on Thursday, if the ECB pushes back against raising rates anytime soon, it could easily lead to rates in Europe moving lower, dragging US rates down with them. This should also be dollar bullish. The dollar index rose by 15 bps today, and it was around 10:30 when the dollar started to move up, and the risk-on rally reversed.

Dollar

The VIX managed to finish the day higher, with the S&P 500 higher. It seems this 15 level is the floor for now.

Volatility Index

AMD (AMD)

AMD reported better than expected results on the top and bottom lines. Gross margins showed no growth sequentially at 48% and in line with expectations. The company sees revenue at $4.5 billion for the fourth quarter, which is better than the estimated $4.3 billion and below the street high of $4.6 billion. Additionally, the gross margin guidance of 49.5% was slightly below estimates for 49.6%. Given the big run-up in the stock, I don’t see how these results were good enough. They are good, but the shares have risen nearly 21% since the beginning of October. I would look for support around $117.

AMD

Alphabet (GOOGL)

Alphabet reported strong results too, but the company missed estimates for its cloud unit. So that is sending the stock down about 2%. There is a gap to fill $2,740, so that should offer some support.

Alphabet

Facebook (FB)

Facebook fell about 4% today and finally broke support at $323, closing around $316. I think at this point; it seems likely that the stock will test support around $300.

Facebook

Originally Posted on October 26, 2021 – Stocks Rise On October 27 As Turnaround Tuesday Finally Shows Up

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.

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.