STOCKS – GS, IBM, ZM, ARKK
MACRO – SPY, VVIX
Stocks finished sharply lower on November 9, with the S&P 500 declining by around 2%. The sell-off in the market accelerate after the 10-Year auction at 1 PM. The auction didn’t go very well, pricing at 4.14% versus a when-issued yield of 4.106%.
I have been looking for a hotter-than-expected CPI report, and I expect that tomorrow. The VVIX has moved up quite a bit over the last couple of days due to the VIX’s rising implied volatility. Sometimes, a rising VVIX can act as a leading indicator to the VIX rising and the S&P 500 falling. I believe the market could be preparing for a hotter-than-expected CPI report, and the need for traders to look for hedges post-CPI.
Bitcoin (BTC)
It certainly didn’t help that Bitcoin and other cryptos assets are getting smashed on this news on FTX and its implosion. The decline in Bitcoin has been long and drawn out, it has had a descending triangle on the chart for months, and it even nearly faked everyone out with that move above the trend line briefly, but that turned out to be nothing more than a throw over. Now Bitcoin is on the verge of cutting through support at 16,650. BTC could trade down to around 10,200 by the time all is said and done.
S&P 500 (SPY)
Meanwhile, the S&P 500 has fallen out of the diamond reversal pattern I pointed out yesterday. Again, 3640 should be the first level of support, but these patterns tend to retrace their origins and make new lows.
Zoom (ZM)
Zoom is very close to making a new low. This stock has been one of the most significant leading indicators of the overall market for months, maybe even longer. If this stock makes a new low, a new low in the broader indexes could be around the corner.
ARKK
The ARKK ETF did make a new low today. I do not even know what to say here.
Goldman Sachs (GS)
I’m still shocked by Goldman Sachs’s run over the past several weeks. You can see the trendline, how close the stock is to the trend line, and the overbought conditions on the RSI. It is very close to breaking the trend line. If the trend line breaks, that is not a good sign for the market because this market has been held together due to the rotation of the growth to value trade. Goldman is an indication of that trade.
IBM (IBM)
The canary maybe IBM after it broke that trend line today when it gapped below the trend line at the opening.
Tomorrow is CPI day, so get a good night’s sleep.
–
Originally Posted on 9th November – Stocks Drop Sharply On November 9, 2022 Ahead Of The Big CPI Report
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. Â Mott Capital Management is not affiliated with any entities in the Interactive Brokers Group. Â
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.
