The week of November 29 is going to have lots of drama starting on Wednesday that is when FOMC Chairman Jay Powell will speak at noon. Thursday, we get inflation data in the morning, followed by Fed minutes at 2 pm. Then of course on Friday the highly anticipated Trump/XI meeting at the G20 summit.
It is hard to say what the most important maybe, but if I had to choose, I would say Powell on Wednesday. The market will need to hear something out of the Fed Chair that he is getting Wall Street’s message and he stands ready to change monetary policy if needed.
Although Trump/Xi is essential, and I think it could help to reduce fears, investors know that interest rate policy could sink any deal ultimately as a result of too much tightening.
The most ideal situation this week: a more dovish Powell followed by a trade deal. Get that, and the market will be on a path to rise sharply.
Rate Hikes Odds Fall
What I find most interesting is that odds for the fed fund rates to be in the 2.25 to 2.50% range by December 2019 continue to rise, while the odds of rates above 2.5% continue to fall.
(CME Group)
Compared to the last time we checked on November 20.
CME Group
Anyway, let’s move on other stuff.
Hong Kong
Let’s start with the Hong Kong Hang Seng Index. Interesting start, right? Well, that is because Hong Kong is the cusp of either a considerable breakout or breakdown. The chart shows that the index is nearing a technical downtrend and resistance level around the level of 26,222. Should the index rise above those levels, I think it setups a clear path higher to 28,230 an increase of 9%.
I think there is a good chance the index does break out and rise. Look at the RSI which has started to trend higher since bottoming in October.
Tencent (700 HK)
If any technology stock is the canary in a coal mine, it is 700 HK otherwise known as Tencent Holdings. This stock topped out in March and has fallen 50% since. The stock looks as if it may be set to rebound to roughly $333, an increase of 14%.
It may be a good sign if the stock market most affected by the trade wars start to turn higher. It may signal a bottom in the US stock market is near.
Germany
The DAX index in Germany is also approaching a critical long-term uptrend.
Russell 2000 (RUT)
The Russell will be one of the more critical indexes to watch this week. It touched its October lows and appears to be creating a double bottom. We cannot confirm a double bottom until we get around 1,590, 7% higher.
Five Below (FIVE)
It makes Five Below a significant stock considering it has one of the biggest weightings in the index. But the chart looks terrible. A drop below $95.90 increases the odds the stock is going to fill the gap and fall to around $81.
ETSY (ETSY)
ETSY’s chart doesn’t like any better than Five Below. But ETSY just filled a gap, and it now may be on its way higher back towards $54. Should the stock fall below $43.40, the next support level comes at $38.75
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The Biotech ETF also looks as if it is trying to bottom, a rise above $78.75, could result in a 6% surge to about $83.
Acadia (ACAD)
The XBI will not rise if Acadia doesn’t lead the way, yes you read that right. Acadia is the most significant part in the ETF with a 3% weighting. The stock fell to and tested support at $18.40. It suggests a rise to $21.50. I think the stock has even further to climb after that. The year long-term downtrend is now broken, and the RSI continues to rise nicely too.
Tesaro (TSRO)
Tesaro is the second largest stock in the ETF, and that too is nearing a break out should it rise above $45.25. It may result in the stock rising to $50 from its current price around $43.
Exelixis (EXEL)
Exelixis is also nearing a breakout should it rise above $19.Â
Amazon (AMZN)
Finally, Amazon. There is not much to say at this point. The stock is stuck between $1450 and $1620.
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.
SP500, Fed, Rates, Amazon, ETSY, ACADIA, EXELIXIS, IONIS, FIVE BELOW,
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Charts used with the permission of Bloomberg Finance L.P. This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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