This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.
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Michael Kramer and the clients of Mott Capital own Acadia and Apple
First I’d like to apologize for the absence of the morning commentary this week. I have been sick all week, running a fever and all. I did not have the energy to get up in the morning to write a commentary that was deserving of being sent out. But I am nearly back to full health, and that means the schedule returns to normal next week.
Stocks In Rally Mode
Stocks rallied on January 25 with the S&P 500 rising by over 80 basis points to 2,664. The index continues to work its way higher, recouping the losses from the selloff earlier this week. The rise today, left a pretty big gap in the chart that may be to filled on Monday or early next week around 2,640. Don’t be surprised to see a 1% pullback early next week.
But more important is that it would seem the global rally we noted about a week or so ago is slowly taking hold.
Hong Kong (HSI)
Hong Kong had a big break out last night, as the PBOC continues to try to boost the economy in China. The Hang Seng increased above a critical level of resistance at 27,350, and now it seems to be on pace to rise to 28,200.
Shanghai is nearing a break out at 2,654.
The South Korean Kospi appears to be well on its way to 2,210.
Even the German DAX is now back above a long-term downtrend and could be on its way higher.
Again, hard to deny the movements in prices. Now the bigger question –is it a bounce and do we see a reversal once we get to the next levels of resistance? It would be naïve to think it isn’t possible. But remember it was the divergence in equity prices that everyone was pointing to in 2018 as a warning sign. At least to start 2019 the indexes seem to be converging and moving higher together. It would suggest to me that the money is flowing into equities globally, and that suggests a reversal is less likely.
It is a big positive when even Intel’s disappointing earnings could not cool down the red-hot chip sector. The SOXX ETF and SMH ETF were both up another 2% today, on top of yesterday’s significant gains.
Micron continues to be one of the big winners in the group and appears to be heading to that big resistance zone we have watched so closely now for some time around $40 to $42.
Well, add AMD to the list of stock I got wrong –again. The stock broke out today, rising above $21 and moved quickly towards $22. $24 is likely the next level of resistance.
Square has been on fire and $83 is looking very likely.
JD.com looks like it may have formed a bullish technical pattern known as a cup and handle. It could result in the stock rising to $26.
It figures that the day after I write that it looks we will have to wait for Apple to report results before the stock goes up, it rises 3% and breaks above resistance. $164 is in play
Acadia is back to its highest level since November, and yes, once again an increase to $24 seems possible.
The good news for Intel is that the stock held support at $46.
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.