Stocks May Pullback on October 18 – But Don’t Freak Out It Won’t Last

Stock Mentions: BYND, MSFTWealth Strength IndexAAPL is Extremely Up and trending Up, CSCOWealth Strength IndexAAPL is Extremely Up and trending Up, VZ, DIS

Macro Mentions: China, Dollar, S&P 500

MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN MSFTWealth Strength IndexAAPL is Extremely Up and trending Up, CSCOWealth Strength IndexAAPL is Extremely Up and trending Up, VZ, AND DIS

US Markets

  • S&P 500 Futures +1
  • US 10-Year 1.77%
  • Dollar Index 97.50
  • Oil 54.53
  • VIX 14.10

International Markets

  • Shanghai -1.32%
  • Nikkei +0.18
  • HK -0.48%
  • KOSPI -0.83%
  • Germany +0.17%
  • UK +0.17%

MACRO

Most markets in Asia were lower following China’s third quarter GDP print of +6%; it was the country’s slowest GDP grow in almost 30-year! And below expectations!

Dollar

The dollar continues to weaken, and again this is a potentially massive tailwind for the US economy. It also should tell us something about what the currency is thinking about the future of economy and interest rate policy against the rest of the world. A weaker dollar would suggest to me that rates in the US will still be heading lower. If the DXY can fall below 96.50, then things will get interesting. The 200-day moving average has been acting as support.

a graph that shows the dollar index falling

S&P 500 Futures (SPY)

The futures are flat, and the chart is showing the S&P is now trading below the uptrend line, and now the falling wedge pattern is entirely in place. It would suggest that the index declines to around 2960 in the futures contracts. A drop will likely only be a short-term move lower, so don’t freak out!

chart of the S&P 500 future and a falling wedge pattern

STOCKS

Beyond Meat (BYND)

Beyond Meat is falling today and is now trading around $115. I still see the gap fill at $100 happening.

a chart of beyond meat showing a gap fill

Microsoft (MSFTWealth Strength IndexAAPL is Extremely Up and trending Up)

Microsoft was resumed with an Outperform and $160 price target at RBC. The stock continues to trend higher and is getting closer to breaking out at $142.

microsoft is getting closer to a break otu at $142

Cisco (CSCOWealth Strength IndexAAPL is Extremely Up and trending Up)

Cisco has held support around $46 firmly, and now maybe it can move back to $49.

cisco has held support at $46 and maybe can now move back to $49

Verizon (VZ)

Maybe one day, Verizon can get over $61. When it does, it can move on to $64.

verizon., vz

Disney (DIS)

Disney looks ok here and bounced back from what looked like could be a steep sell-off.

disney appears to be breaking out

Have a good one.

-Mike

This article appeared first on Mott Capital Management.

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