Monster Stock Market Commentary

May 30 – Stock mentions: AAPLWealth Strength IndexAAPL is Extremely Up and trending Up, AMZNWealth Strength IndexAMZN is Moderately Flat and trending Up, INTCWealth Strength IndexINTC is Moderately Up and trending Up, TSLAWealth Strength IndexTSLA is Moderately Flat and trending Up, V,

Michael Kramer and the clients of Mott Capital own AAPLWealth Strength IndexAAPL is Extremely Up and trending Up, V, TSLAWealth Strength IndexTSLA is Moderately Flat and trending Up

US Markets

  • S&P 500 Futures +12 points
  • US 10-Year 2.26%
  • VIX 17.23
  • Oil $59.13
  • Dollar Index 98.12

International Markets

  • China Shanghai -0.31%
  • Hong Kong HSI -0.44%
  • Japan Nikkei -0.29%
  • South Korea KOSPI +0.77%
  • UK FTSE +0.45%
  • Germany DAX +0.59%

International Markets

Shanghai

Perhaps there are at least signs emerging that the global markets are stabilizing. While the US equity market has drifted lower, markets overseas continue to show a bottoming process, especially in China. We can see that the Shanghai Composite has managed to stabilize between 2,825 and 2,920. Overall, the RSI for Shanghai continues to trend higher longer-term, and we can begin to see that shorter-term the RSI is now starting to rise.

Shanghai, china

US Trading

Semis (SMH)

The Semis appear to have a pretty solid correlation to that of the Shanghai composite, and perhaps the two are a signal the broader sell-off may be entering or has entered its last phase down.

S&P 500 (SPY)

While of course, there is a strong correlation between the Semis and the S&P, one can also see the divergence between the semis and the S&P 500 had in the middle of the summer. That, of course, looking back on things may have been the canary in the coal mine at the time.

S&P 500, smh

The levels to watch for the S&P 500 today come at 2,768 and the 200 day moving average around 2,770.

S&P 500, spy

Semis (SMH)

For the semis, the most critical level for the SMH is at $96.50.

smh

Tesla (TSLAWealth Strength IndexTSLA is Moderately Flat and trending Up)

Perhaps the days of Tesla’s free-fall are coming to an end. We can see that the stock has held around the $190 level for the last few trading session, and now it would appear a falling wedge pattern is forming, suggesting a climb back over $200 towards $210.  I still think there is upside to $250.

tesla, tsla

Amazon (AMZNWealth Strength IndexAMZN is Moderately Flat and trending Up)

Amazon has been a reasonably quiet stock in recent weeks, but that may be about change. The stock has held support firmly around $1800, and the pattern in the stock suggests that the stock rises. The shares could be approaching a break out that sends it back to $1850 and then potential higher towards $1900.

Amazon, amzn

Intel (INTCWealth Strength IndexINTC is Moderately Up and trending Up)

Intel has held firmly above $42.50 and that continues to indicate to me rise back to $46.

Intel, intc

Visa (V)

Visa appears to have formed a bullish rising triangle. An increase above $165.80 sets up a move towards $173.

visa

Apple (AAPLWealth Strength IndexAAPL is Extremely Up and trending Up)

Finally, Apple may be the biggest bell weather of them all when it comes to the risk of the trade war. As I noted yesterday, there is a falling wedge in the chart, and it suggests AAPLWealth Strength IndexAAPL is Extremely Up and trending Up rises perhaps back to $182 for starters.

apple, aapl, stock

Good Luck today!

-Mike

Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.

The post Can The Stock Market Turn It Around on Thursday, May 30? appeared first on Monster Stock Market Commentary.

May 29 – Stock Mentions: SMH, SWKSWealth Strength IndexSWKS is Extremely Up and trending Up, FDX, JDWealth Strength IndexJD is Flat and trending Up, BABA

Michael Kramer and the clients of Mott Capital own SWKSWealth Strength IndexSWKS is Extremely Up and trending Up

While the bond market sends secret smoke signals about the economy to the equity market, perhaps the chip stocks are sending a secret message of their own.

Semis – (SMH)

The chips stocks have been one of the most horribly hit groups during this recent sell-off with the SMH falling a stunning 19.3% (input bear market headline here) just since April 24. But today, they did something unusual; they went up. Yes, they even went up even as the stock market appeared to plunge into the abyss. Amazing stuff.

It seems really en vogue to price everything relative to the S&P 500, so when we look at the SMH relative to the SPY, the ratio is almost back to the fourth quarter doldrums. You know, the first time we were heading to economic doom that never happened.

Oh yeah, the message. The message –perhaps the group, along with the rest of the market is starting to find a bottom and perhaps is even oversold.

smh/spy

S&P 500 (SPY)

Anyway, moving back to doom and gloom. The S&P 500 did a few things today that I found interesting. First, it managed to hold support at the 200-day moving, check. Second, it bounced off the middle downtrend line, check 2. Third, it managed to hold support at 2,768, check 3

I’m not sure alone it means much of anything. But, when you combine that with the action in the chips and it is something to at least build off.

S&P 500, spx

FedEx (FDX)

Throw in a dash of FedEx, and suddenly you could say perhaps we have the makings of something.

I was starting to believe that FedEx wasn’t allowed to rise anymore, but that is what it did today. Then of course when you look at FedEx relative to the SPY, you scratch your head. FedEx hasn’t traded at these levels since the recession in 2008.  You have to ask yourself are things really that bad?

fedex, fdx

Skyworks (SWKSWealth Strength IndexSWKS is Extremely Up and trending Up)

When a stock is down by 30% inside of a month, and then it suddenly stops going down, and volume is drying up, you need to take notice. Of course, it could mean the stock is consolidating and getting ready for another leg lower. However, it could also mean that the stock is finding a bottom as the sellers dry up.

skyworks, swks

Alibaba (BABA)

Or you could be Alibaba, that has volume increasing despite the stock making fresh lows. That is not a good sign. It means more seller’s maybe creeping in. Careful, next stop could be $141.

alibaba, baba

China Currency (RMB)

It doesn’t particularly look good either when the RMB appears it is getting ready for its next leg lower. But don’t worry the Chinese government will crush any short-seller that bets against the yuan.   Don’t worry its totally free floating with no government intervention… OK 😆

usdcny

JDWealth Strength IndexJD is Flat and trending Up

For JDWealth Strength IndexJD is Flat and trending Up neither.

jd

…to be continued…

-Mike

Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.

The post The Bond Market Is Not The Only Group That Sends Out Secret Signals appeared first on Monster Stock Market Commentary.

May 29 – Stock Mentions: AAPLWealth Strength IndexAAPL is Extremely Up and trending Up, NVDAWealth Strength IndexNVDA is Extremely Up and trending Up, MSFTWealth Strength IndexMSFT is Extremely Flat and trending Down, NXPIWealth Strength IndexNXPI is Moderately Up and trending Up, IWM

Micheal Kramer and the clients of Mott Capital own AAPLWealth Strength IndexAAPL is Extremely Up and trending Up, MSFTWealth Strength IndexMSFT is Extremely Flat and trending Down, NXPIWealth Strength IndexNXPI is Moderately Up and trending Up

US Markets

  • S&P 500 Futures down about 17 points
  • US 10-Year 2.23%
  • Oil -0.03%
  • VIX 18.32
  • Dollar Index 97.99

International Markets

  • Japan Nikkei -1.21%
  • Shanghai +0.16%
  • Hong Kong HSI -0.57%
  • South Korea Kospi – 1.25%
  • Germany DAX -1.12
  • UK FTSE -1.33%

International Trading

Shanghai

The Shanghai Composite reversed a lower start to the day to finish higher. We can see that the index has managed to continue its trend higher.

China, shanghai

South Korea

But an unencouraging sign is that South Korea KOSPI had a weak session falling by over 1%. We can see that the index dropped below the latest support levels, and the message coming from this market is not encouraging for global markets.

kospi, south korea

The more work I do the less of a correlation I find between the S&P 500 and South Korea. You can see for yourself. So although an important market to follow it doesn’t translate well to the S&P 500 performance.

Germany

We can also see that the German DAX has broken down as well, and is currently resting at support.

germany dax

US Trading

S&P 500 (SPY)

The S&P 500 will be in focus once again, and clearly, the international markets are signaling more trouble ahead. But we must remember that the US drives the global growth engine, not the other way around. So, many of these markets are feeding off the momentum from the US close yesterday.

Still, 2,800 is the next region of support for the S&P 500, and at the moment it looks as if we are set to open slightly below that level.

While a drop below 2,800 is not good, it isn’t the end of days, not yet. The support region extends down to 2,787. A break below 2,787 will pressure the S&P 500 lower. We can see that RSI has reversed lower, and that is another negative sign as well.

S&P 500, spy

Apple (AAPLWealth Strength IndexAAPL is Extremely Up and trending Up)

Apple may be the essential stock to watch, as the pattern in AAPLWealth Strength IndexAAPL is Extremely Up and trending Up is bullish and as of right now, the shares hitting the lower levels of support around $175 I had pointed out last night. Watch for a reversal in Apple and push higher towards $182.

Apple, AAPl

Nvidia (NVDAWealth Strength IndexNVDA is Extremely Up and trending Up)

Nvidia is also searching for a bottom, and while NVDAWealth Strength IndexNVDA is Extremely Up and trending Up’s bottoming process doesn’t look as advanced as Apple, it appears one is forming, I’d look for a bounce around $139.

Nvidia, nvda

Microsoft (MSFTWealth Strength IndexMSFT is Extremely Flat and trending Down)

Microsoft continues to look favorable to me, with an opportunity to rise towards $136.

Microsoft, msft

NXP (NXPIWealth Strength IndexNXPI is Moderately Up and trending Up)

NXP also has a falling wedge pattern forming, and that too would suggest a reversal is on the way too.

nxpi, nxp

Russell 2000 (IWM)

The IWM also has a falling wedge pattern, again another bullish pattern.

IWM, Russell

Don’t lose hope, not yet, we have come too far. I’m not a perma-bull. Trust me; I can be just as negative, if not more, then anyone else. But I March to the beat of my own drum and refuse to be a sheep.

-Mike

Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.

The post 5 Signs A Big Reversal May Be Forming In The Stock Market appeared first on Monster Stock Market Commentary.

May 24 – Stock mentions: AAPLWealth Strength IndexAAPL is Extremely Up and trending Up, AMD, JDWealth Strength IndexJD is Flat and trending Up, MUWealth Strength IndexMU is Extremely Flat and trending Up, CSCOWealth Strength IndexCSCO is Moderately Flat and trending Up

Michael Kramer and the clients of Mott Capital own AAPLWealth Strength IndexAAPL is Extremely Up and trending Up and CSCOWealth Strength IndexCSCO is Moderately Flat and trending Up

Stocks had a decent start to May 28 testing resistance and the downtrend to start, but that eventually gave way to late day selling. Clearly, the trend, for now, is too strong. On the day the S&P 500 finished about 85 basis points lower. It wasn’t the trade war grabbing the headlines today, but rate worries and what that means for the economy.

In my view, falling rates means nothing for the economy. We live in a low-interest-rate world, and that isn’t changing. Rates in the US are falling based on supply and demand, have you look at German rates lately? Or Japanese rates? The German Bunds trades at -16 basis points. It really is common sense! Who Bonds would you rather own a US 10-year at 2.3% or a German Bund at -0.16%. Do I have to answer?

I spoke about this in my video today and used some good chart to show why this happening – Big Day For Stocks Comes May 30.

True falling rates may have something to do with slowing growth somewhere in the world –mostly Europe. But then again, Europe hasn’t grown for years. But this is the one chart you need to follow the most closely the US 10-Year minus the German 10-Year. We can see that the spread is still incredibly wide, and is on the verge of breaking down significantly, which means that US rates will begin to fall at a faster pace then German bunds.

Rates

So if you think rates are low, wait they are likely heading even lower. I said this once; I will say it again –to 2%.  It is not, a sign of a US recession; it is an issue of global supply and demand for bonds, and the lack of inflation.

S&P 500 (SPY)

The S&P 500 has been unable to rise above 2,836 the past two trading session and is now breaking down and must hold above 2,800. A drop below triggers the next leg lower to 2,785 and potentially 2,735.

S&P 500, spx stocks, may 28

Nasdaq (IXIC)

The NASDAQ is clinging for life at 7,600, and a drop below here sets up a decline to 7,430.

Nasdaq, IXIC , may 28

It may be an understatement to say we find ourselves once again in a precarious position.

Apple (AAPLWealth Strength IndexAAPL is Extremely Up and trending Up)

If there is a shimmer of hope, it is Apple. We can see on the chart how a falling wedge pattern has formed. It is a bullish reversal pattern. But at this point, the chart first suggests there is more for the stock to fall, maybe to $175.

apple, aapl stock may 28

AMD (AMD)

AMD had a great day rising above the downtrend and testing resistance at $29.40. The RSI broke out today as well. First things first, the stock needs to break through 29.40, then we can think about $31.40.

amd stocks may 28

JDWealth Strength IndexJD is Flat and trending Up.com (JDWealth Strength IndexJD is Flat and trending Up)

JDWealth Strength IndexJD is Flat and trending Up.com appears to be in trouble once again, with a drop below $26 pushing shares to around $23.50.

jd may 28 stock

Micron (MUWealth Strength IndexMU is Extremely Flat and trending Up)

Micron keeps getting worse, and the decline below $32.50 sets up a drop to $29. Let’s hope that doesn’t happen.

micron, mu

Cisco (CSCOWealth Strength IndexCSCO is Moderately Flat and trending Up)

Cisco looks like it may refill the gap to $52.25.

cisco, csco may 28

That’s all for today. Just think we start getting PMI’s on Thursday night!

-Mike

Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.

The post Rates on The 10-Year May Hit 2% – I Have Said This Before, Haven’t I? appeared first on Monster Stock Market Commentary.