A Global Stock Market Break Out Is Now Happening

Michael Kramer and the clients of Mott Capital own Acadia and Apple

Independent macro and options research, published every trading day — $85/mo or $750/yr

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

Shanghai is nearing a break out at 2,654.

KOSPI

The South Korean Kospi appears to be well on its way to 2,210.

Germany (DAX)

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.

Semis

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 (MU)

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.

AMD

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 (SQ)

Square has been on fire and $83 is looking very likely.

JD

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.

Apple (AAPL)

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 (ACAD)

Acadia is back to its highest level since November, and yes, once again an increase to $24 seems possible.

Intel (INTC)

The good news for Intel is that the stock held support at $46.

-Mike

Michael Kramer publishes independent macro and options research read across 10+ platforms and by institutional desks. For research syndication, licensing, or consulting inquiries, visit michaeljkramer.com.

Photo From Flickr

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.

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.