March 25, 2019
Michael Kramer and the clients of Mott Capital own Apple and Netflix
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- S&P 500 Futures down 5 points
- 10-Year Yields 2.46%
- Oil $58.90
- VIX 17.22
- Japan Nikkei -3.01%
- China Shanghai -1.97%
- Hong Kong HSI -2.03%
- South Korea Kospi -1.92
- German DAX -0.14%
- UK FTSE: -0.37%
Major Asian markets all tanked as a knee jerk reaction to the US market sell-off on Friday. I would not consider the Asian markets as an indicator of US trading. European stocks, for the most part, are down only modest amounts and are more indicative of how the US markets may look.
Treasury yields on the 10-year could rise back to around to 2.55% over the next couple days to weeks.
As long as yields rise over the coming days, I believe that will relieve investors anxiety over inverting yield curve and should help stock price to rise.
However, yields longer-term are trending in a direction that is lower. It means that watch yields and their direction will be the most important thing to watch over the coming days.
S&P 500 (SPY)
The S&P 500 has a zone of support between 2,792 and 2,798 which needs to hold today or the risk of a further drawdown increases. Should that support region not hold the next level of support would not come until 2,765. I think, however, that the S&P 500 does find the support needed around 2,798 to bounce back and move higher by days end.
The Russell’s next major level of support comes around 1,492. This level also needs to hold, or the risk of a further drop to 1,456 become possible.
It’s Apple big day when it reveals its new streaming services. Support for the stock comes around $188. It may prove to be a sell the news event for now, with the potential for shares to fall back to $182 in the days that follow.
I do not see Apple’s new service being a significant threat to Netflix. Netflix has a dominating command on the streaming world. The only way Netflix could be damaged is if Apple does not allow the Netflix app on the iOS devices anymore, which would a significant blunder for Apple. I can’t see that happening, and I think Netflix continues to be the leader here.
Support for Netflix comes at $355, while resistance remains at $378.
Qualcomm shares are now overbought and have failed at resistance a couple of times at $58. I think that sets the stock up for a further drop to around $55.
AMD has a pretty significant level of support around $25.70, and all the signs suggest that one continues to rise. There continues to be a well-defined uptrend in the stock, and the RSI also points to higher prices as well.
Boeing fell below support at $371, and that price will act as resistance. I think the stock still has further to drop to around $330.
Micron could continue to drop and fill the gap to $40.25.
Have a great day
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