I know many will throw cold water on the notion that the May sell-off was Fed-related, but don’t discount it. Remember the Market sold off reasonably hard following the Fed meeting, only rebounding after the strong April jobs report. If the market continues to rally in the coming days and weeks despite any progress on the trade front, we will likely find out the answer.
I have mostly kept these thoughts to myself because I didn’t have much evidence to support this viewpoint, but after today, I do feel more strongly that the May sell-off was just as much Fed-related as tariff related. Sure, tariff news didn’t help, and likely added about 1-3% extra to the sell-off. But before you cast my view as crazy, let’s give it some time to play out. Sound Fair? Good. I’m glad we agree.
S&P 500 (SPY)
Anyway, the S&P 500 managed to test 2,800 today even closing above it. But I noted in my premium video that before we get all excited, we need to see the S&P 500 close above that May downtrend line. Right now it sets up a resistance zone starting at 2812 and working its way lower. For me to grow even more bullish, we need to see that uptrend broken tomorrow and close above it on June 5. On Break Out Watch – But Not Yet
I have telling you for days to watch the semis, and that the SMH was screaming a bottom was in near. Sure enough, the SMH jumped over 4%. You can see that the SMH broke out today rising above resistance at $101. I think it opens the door for a rise to around $104 and perhaps as high as $106. I bought some SMH calls today, for full disclosure.
Apple was already on our radar, and today, the stock made its first move towards $182, and I noted yesterday in a premium article, the AAPLWealth Strength IndexAAPL is Extremely Up and trending Up could rise to $195. Apple May Be Overdue For A Bounce
Tesla also had a pretty significant rally on June 4, and it would appear that it may be breaking out too. Rising above resistance at $191.50, and breaking a downtrend. I noted today in a premium article TSLAWealth Strength IndexAAPL is Extremely Up and trending Up could rally to around $205. Tesla’s Breaking Out?
In yet a positive sign for AMD, the stock closed for the first time above resistance at $29.40. Does that set up a rally to $31 now? It sure looks like it may.
Roku appears to be getting ready to break and move higher towards $100.
Intel looks like it may finally make that move to $46.
No blog in the morning, I have to take my dog in for eye surgery. Back June 5, Wednesday night.
This article first appeared on Mott Capital.
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