The S&P 500 Is Getting Ready to Race Right Through 2,800

Back to Rally Mode?

Stocks had another active day on February 22 with the S&P 500 rising nearly 65 bps to 2,792. At this point, it would seem that the 1 to 2% sell-off I had thought we were going to get is not going to happen, or it occurred yesterday and it was much less severe than I anticipated. But then again that is why investing is such a humbling experience because it can make the best of look like fools at points. So a blow to my confidence, I won’t lie, a bit. I had felt so sure that we get a 1-2% pullback. It happens, we can be wrong.

What happens now? It has become clear to me that there are many signs that the S&P 500 is likely to power right through this 2,800 level. I did a video today on the premium service and went through many charts that suggest the global stock market will continue to rally. I will get into more detail over the weekend. Here is a link, you can get two weeks free when you sign up: Signals Strengthen For Stock Continuing To Rise

Russell 2000

The Russell is now near 1,593 and this a significant level for the index. If it can increase above that level it has room to go back to 1,700. There is very little to stand in the way of that happening should it break out.

russell,

Housing Index (HGX)

The housing index is also close to a big break out should it get over 295.

hosuing,

Copper

There appears to be an enormous appetite for copper with the metal rising to $2.94. I think what makes the big move in copper even more impressive is that it is happening without the dollar weakening.  The fact that copper is strengthening on a strong dollar suggests that there is a real demand in the market place for the metal. Notice that copper peaked in the late spring around the same time that many of the export stock markets start falling. It tells us something about global demand, and what we have seen in global equity prices.

copper,

BHP

The mining giant BHP is breaking out of a one-year long trap. $57 is the next level of resistance.

bhp

Apple (AAPL)

Apple continues to show signs of moving higher. I think we can confirm that the stock has broken out with the opportunity for the stock to rise to $182.

aapl

Square (SQ)

Here is a free story on Square today, call it an earnings preview.  Square’s Stock May Jump Following Its Results.

Roku

Roku went nuts today, rising back to resistance at $64.50. I guess the pop should not be much of a surprise, with nearly 35% of the float short.

roku

Chipolte (CMG)

Chipolte has stalled at $604. What is interesting here is that the stock has stopped rising as volume has fallen dramatically. It would suggest to me that buyers are drying up. I still think the stock falls back to the $550 region. That RSI is overbought and is trending lower longer-term. That is a bearish indicator for now.

cmg, chipolte

That is going to be it.

-Mike

This article first appeared on Mott Capital.

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. February 22 S&P 500