MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN APPLE, SKYWORKS, NETFLIX, DISNEY
Good Morning Today is Wednesday, January 9
- S&P 500 futures are pointing to a higher opening of 4 points as of 8:00 AM
- The US 10-year rate is at 2.73%
- Dollar Index is at 95.86
- WTI Crude Oil is $50.79
- VIX: 20.47
- Critical events for today: FOMC Minutes at 2 PM, Fitch warns of US Debt downgrade.
Recap of International Trading:
- Hong Kong Hang Seng Index up 2.27%
- Japan up 1.10%
- China Shanghai Comp. down 0.71%
- UK FTSE up 0.95%
- Dax up 0.95%
Hong Kong (HSI)
Hong Kong stocks rocketed higher last night, and the setup in this market is starting to look very bullish. The chart below shows what appears to be the formation of a double bottom. The index also cleared key resistance at 26,222, and now it may be on its way to 28,231.
Additionally, we can see another positive sign is that 700 HK, Tencent, is now nearing a potential break out should it rise over 333 HKD. That could result in an increase to 367 HKD.
FTSE 100 is also breaking out rising above resistance at 6,893 and may be on its way to 7,165.
According to the WSJ, Goldman now thinks US Bond yields may have, topped out, and the dollar may weaken. Glad they are coming around to my view, which I have said for some time now.
S&P 500 (SPY, SP500)
The S&P 500 now continues to be on the road to 2,630. There is a mild level of resistance around 2,580, but, I do not see that being anything more than a mild level. For now, hopes of a trade deal are rising, and with the Fed worries in the rearview mirror at least for the moment, equity prices can increase further.
Overall, we see a change in trend throughout the global equity complex from bearish to bullish.
Tim Cook gave a great interview last night with Jim Cramer. The most impressive part of the discussion to me was Cook’s commentary around the future of the company which appears to be around healthcare. He noted he sees healthcare as being Apple’s most significant contribution to humanity. Certainly a surprise, even to me.
While it feels good that the stock is rising, I must remind you that this may also be the Algo’s playing a game of fill the gap up to $155. That price remains a resistance level that will decide if Apple has further to rise or if there is a retest of the lows on the way.
Of course, it wouldn’t be a week if there wasn’t a report of more iPhone production cuts.
Apple supplier Skyworks pre-released its fiscal first quarter 2019 earnings, noting revenue of about $970 million versus expectations of $1.00 billion and earnings in the range of $1.80 to $1.84, versus estimates of $1.91. The market appears to have expected something much worse because the stock is trading up about $4 pre-market to $69.
We need to wonder if Skyworks will be a part of a broader theme of the market pricing in something much worse than reality. My hunch here is that there are plenty of stocks in the same situation as Skyworks.
Once the deal with FOX is complete Disney will be the majority owner of Hulu. Yesterday Hulu said its subscriber base grew to around 25 million. I would have thought Disney would risen more, but the market for now seemed to have forgotten about Disney’s stake in Hulu. Resistance for Disney’s stock is at $116.50
Netflix is getting closer to $330, and today we likely find out what happens next. A rise above $330 likely means a move to $355.
Alibaba’s chart is looking very much likely that of Hong Kong’s with that nice double bottom formation on the one-hour chart. A rise above $151 means $166 is coming.
JD.com is breaking out and could rise to $26.
Micron chances of rising to around $36 seems to be improving.
Good Luck today!
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