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May 29 – Stock Mentions: AAPL, NVDA, MSFT, NXPI, IWM
Micheal Kramer and the clients of Mott Capital own AAPL, MSFT, NXPI
- S&P 500 Futures down about 17 points
- US 10-Year 2.23%
- Oil -0.03%
- VIX 18.32
- Dollar Index 97.99
- 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%
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.
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.
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.
We can also see that the German DAX has broken down as well, and is currently resting at support.
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.
Apple may be the essential stock to watch, as the pattern in AAPL 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.
Nvidia is also searching for a bottom, and while NVDA’s bottoming process doesn’t look as advanced as Apple, it appears one is forming, I’d look for a bounce around $139.
Microsoft continues to look favorable to me, with an opportunity to rise towards $136.
NXP also has a falling wedge pattern forming, and that too would suggest a reversal is on the way too.
Russell 2000 (IWM)
The IWM also has a falling wedge pattern, again another bullish pattern.
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.
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.