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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Apple (AAPL) easily beat analyst estimate when it reported results tonight, and to no surprise, the stock pop by over 6 percent, and the rest of the supply chain went right with it. Cirrus Logic (CRUS), Qorvo (QRVO), Skyworks Solutions (SWKS), and Broadcom (AVGO), all jumped from 1.5 to 5 percent.
AAPL Price data by YCharts
The better than expected guidance brings a sense of relief to those investors believing that Apple may have delayed the launch of the new iPhone 8.
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It wasn’t just the Apple suppliers that jumped with Apple, it was the whole tech sector that popped, with even the Technology Select Sector SPDR (XLK) jumping by over 1.5 percent following results.
Believe it or not, even with the XLK’s run, it has still not surpassed the highs seen in March of 2000, when it reached, nearly $65.
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Also, notice the difference in volume, in the ETF over the years, how it has been steadily growing from near non-existent levels back in the day.
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In the chart above we can that the Financials continue to advance higher, up by over 80 bps, versus an S&P 500 that was up only 25 bps. The XLF continues to gain solid traction, and grind higher after filling the gap, late last week. On the following chart, it is clear that the XLF passed the last level of resistance on the near-term chart, and is likely on its way higher from current levels.
Now, that hurdle has been cleared; the ETF has a path to reach levels last seen in 2007-2008, around $30.
If you feel like you aren’t making more money in recent years, it is likely because you aren’t.
And if you are worried about inflation, you likely should not be.
If you look at the circle, it would appear to be a triple top formation on the chart, a technical analyst indicator, which is bearish on inflation, indicating that inflation is likely to fall further.
Have a good night.
Michael Kramer and the Clients of Mott Capital Management own shares of SWKS.
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 recommendation made during the past twelve months. Past performance is not indicative of future performance.