Stocks managed to rally on a very volatile day yesterday, with the S&P 500 rising by more than 1%, then falling back to flat, and then managing to finish up around 60 bps. The index was very close to breaking out and clearing a resistance level at 3,960, but it got stuck up there, and stalled out. Additionally, the RSI has topped out on the 1hr chart, suggesting momentum may have peaked.
VIX)
Option flows have been very bearish the past two days, based on negative delta flows that suggest put buying and calling selling. But the VIX movements have been muted and have not reflected this negative option flow. I’m confused and frustrated by the action of the VIX. Sometimes, what should be happening and what happens doesn’t work out. The VVIX is near its lows and gives a sense of complacency in the market heading into the FOMC meeting next. If the VIX doesn’t rise, it will be going into the FOMC at its lowest level this year. It is an under / over I would not want to take the under on. But, hey there are a lot of people out there who think things are just great, because the S&P 500 has gone up a two days in a row.
Not to mention today we have an ECB meeting.
Tesla
Tesla (NASDAQ:TSLA) is trading flat after reporting mixed results. The numbers look okay, not great. Interestingly, the company noted in the slide deck that they had converted nearly 75% of their Bitcoin holdings into fiat currency. This did help to boost their free cash flow, while cash flow from operations fell for the second quarter in a row.
The stock is just consolidating at this point, with no real direction. The RSI is trending higher, suggesting bullish momentum, but the stock needs to get over $770 to make a significant move.
Boeing
Boeing (NYSE:BA) rose above resistance yesterday and has an RSI that is approaching 70. The stock has a bit further to climb before completing the gap fill at $167. The stock has a good chance to fill the gap, but I’m not sure there is much additional room for it to rise near-term after that.
Netflix
Netflix (NASDAQ:NFLX) reported some of the worst results I have seen from them in a long time. Cash flow will become a focus for investors if it hasn’t already. Yes, the stock rose sharply yesterday, but it had to bounce at some point. The RSI is approaching 70, and I think it is unlikely that the stock is beginning a new long-term uptrend. I don’t believe the stock will get much beyond $230.
Have a good one