MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF NETFLIX, APPLE, ALPHABET

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It was another dull day for stocks with the S&P 500 falling just 15 basis points, and the NASDAQ rising 42 basis point. Like I wrote yesterday, I was expecting a market rebound today, and for the most part that was what we got, at least across technology and consumer names.

Anything But

To an onlooker that may very well be what December 6 actually looked like. But to anyone paying attention all day, I will say today was one the wildest days I have seen in my 25 years. Yeah it was that was crazy. I will put it like this; at its lowest point the S&P 500 was down around 2.85%, the Dow was down over 3%, and the NASDAQ was down about 2.5%. That how insane the trading was. I was serious when I said the S&P 500 was down only 15 bps and the NASDAQ was up.

^DJI data by YCharts

I wrote in the morning commentary: 

It is always darkest before the dawn, and although it feels dire today as it should. The charts below suggest there are critical levels of support to watch, that if they can manage to hold may end up being very bullish. But the key here is they need to hold. It will test the resolve of the bulls and prove just how much conviction the bears genuinely have. We shall see.

Holding Support

For the most part, the levels that I noted this morning held very firmly, and with that, I think the Bear market died a horrible death today. The type of action we saw today, as I wrote in my premium members board at 12: 33: It “feels” like a capitulation type of day. 

The market also got a much-needed boost late this afternoon, when the WSJ reported – in what I would call a Fed trial balloon, that the Fed is likely to move to a wait and see approach. 

Sentiment in the market had started to change even earlier than that, let me show you.

Amazon (AMZN)

Amazon gapped lower right to our favorite support/resistance zone around $1,620 and held firm. It was around 11:30 am that Amazon started to move higher.

Netflix (NFLX)

It was around 10 AM that Netflix started to climb. 

Alphabet (GOOGL)

Alphabet also started to turn higher at 11:30 AM. 

Facebook (FB)

Facebook bounced hard off support at $133 and climbed higher from the start of the day.

S&P 500 (SPX, SPY)

I wrote this morning the S&P had to hold 2632, and it traded as low as 2623, at 11:30 am then started to advance.  I say that was pretty close to what I had written earlier in the day if you want to split hairs over 8 points, be more guest.

NASDAQ (QQQ)

I had noted that the NASDAQ had to hold 7000, it did just that. Even better it closed above resistance at 7175.

Russell (RUT)

I wanted the Russell to stay above 1453; it fell as lows as 1442 and found a bounce.

Apple (AAPL)

Apple needed to hold $170. It did just that too.

Leadership

The FANG stock have been the leaders all year and today they acted like market leaders once again.  It tells me that despite all the turmoil and hand-wring this morning about the arrest of the CFO of Huawei CFO most of the bad news and the markets worst fears have been priced in. By the way, if you didn’t read this story on Huawei from the South China Morning Post, please read it, it says a lot. I noted it this morning.

Agree to Disagree

Oh, I know there are going to be those people that say the market is going to go down and this was just a fake out, and trade worries and blah blah blah. But I would disagree, I do believe this may have been the wash out day that was very badly needed. Maybe I will be proven wrong. I have plenty of readers that seem to like to tell me when I’m wrong. Even when I am right, I can still be wrong – I call that selective memory. So I could very be wrong this time, but to me today just “feels” different.  Maybe my memory is selective too, who knows.

Anyway, you can be the judge. Only in hindsight will we know, but something felt very different today. That is my take.

But what do I know?

Until tomorrow

-Mike

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Photo Credit Via 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

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