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Here Come The Chip Stocks, Are The Banks Turning For The Better, More

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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF NFLX, NXPI, AND V

MICHAEL KRAMER OWNS XLF PUTS

I’ll take this moment today to remind people there is much more to life than investing and stocks. To some investing is a hobby and to others, it is their livelihood, but do not let it consume you.

We are all human, and nobody can pick the winners 100 percent of the time or from what I can tell even 60 percent. In a baseball analogy, one of the greatest hitters of all time Ted Williams made an out 6 out of 10 times the season he hit .400.

My mother’s sister passed away over the weekend and today we said goodbye. Life goes way to fast, investing is only a part of it. Just remember to take the time to enjoy life too.

Now on to stock stuff….

Moving on

The S&P 500 continues its advance, and I think we are just getting going with this advance, and that new high shall be coming.

If we turn to the risk-on group -semis, they had a good and are nearing a massive break out if they can clear $108, I’m giving a buffer zone, and could be heading back to $112.

Micron

I believe that Micron has broken out, and is likely on its way back to $61 now.  We can see the RSI has turned higher, and even volume popped up on today’s uptick. I think these are positive signs, and I believe Micron continue its way up.

 

On

ON Semi looks it could be on its way to $26.50.

NXPI/QCOM

The NXPI/Qualcomm has only a few days left to get its deal approved by the Chinese regulators, and at this point, no one has a clue what will happen. Believe it or not, I have held NXPI for nearly four years now. I have to tell you I have never been a fan of this deal. I always thought NXPI was getting taken over for too low of a price given its place in automotive chips. I also think Qualcomm is in desperate need of getting the deal done because their revenue stream seems to be on shaky ground.

Its anyone’s guess if the deal gets approved. I wouldn’t be surprised if the deal gets approved at the very last minute. Just sayin’. 

Banks

These banks have me biting my nails these days. Sure they are beating estimates. That is because forecast had were lowered so much. BofA earnings estimates were cut by 10 percent just before results. But yet the market is applauding those results. But this is where things get tricky, and emotions start coming into play, because let’s face nobody wants to be wrong, and nobody wants to take a profitable trade to see it turn into a losing one. But the banks are acting well, and that makes me think that perhaps momentum is shifting and that I need to be changing my thinking.  That is what trading is about.

The outlook on yields and spreads has not changed. Earnings growth is still forecast to slow materially next year. I had started getting bearish on the banks sometime in March and started focusing a lot on them sometimes at the end of May or so if I remember correctly.

Despite the big rally the past few days, the XLF is still down over 7 percent it highs. Dead cat bounce?   I’m not trying to be wishy-washy here, I’m just questioning myself, and figure out what the market is trying to tell me that I may be missing from my previous thesis.

I need to think more.

XLF data by YCharts

Netflix

Netflix once again failed at $382, and if the stock can’t hold these level around $370, then I think there is a good chance we retest the $345 to $350 region, we will see what happens tomorrow.

Facebook

Facebook keeps going up. $220 would look easy at this point.  I saw some bets in options trades implying the stock rise to about $222. 

Boeing

Boeing didn’t quite get to our $320 price. Hey, it got about $325, and so I call that being close enough. I’m not great with cup n’ handle patterns, but that is what Boeing’s is starting to look like to me. So that means a break out above $371 is probably coming.

Amazon

Well, Amazon went right through $1840. I have no clue where it goes next at this point. It just seems like these guys can’t do anything wrong.

Visa

Visa is getting awfully close to $145 target as well.

Always remember to stay honest with yourself and try not to let your emotions get the best of you. You can see even I question myself all the time. For the most part that is how we get better and learn. I use this blog not only to help my readers but also to track my thoughts.

One must stay flexible and list to the signs the market is telling us. We aren’t going to get these signs right all the time, but if you can get them right just 50 percent of the time you are can probably do well for yourself.

No commentary tomorrow, I’ll be speaking at StockTwits Future Forum in NYC.

Until Friday, best of luck.

-Mike

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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.