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.
Otherwise, enjoy the column!
Subscribe to the Monster Stock Market Commentary and join the 2,380 subscribers getting it for FREE every day!
MARCH 11, 2020
STOCKS, BA, AAPL, MSFT, GLD
MACRO: SPY, QQQ, GOLD
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN MSFT, AND AAPL
Geez. This market is freakin’ tough. I can’t remember a challenge like this in a long time. Big levels mean nothing. I’m not going to lie, today’s sell-off at 3 pm, had me rattled, and anyone that follows me, knows I don’t rattle so easily with this stuff. At that moment in time, honestly, I felt like every glimmer of hope was diminishing.
Sorry, I’m not trying to be doom and gloom, but I’m trying to let you know that if you felt that way today, you are not alone.
I mean, if you want the bad news, we broke the 2735 level intraday today, which is not a positive. If you want the good news, we closed at 2741. So from a closing basis, 2735 is still our support level. So “technically” we can say that support has held, but it sure doesn’t leave me all warm and fuzzy.
Again, the RSI is still trending higher, and while it is not that important at this exact moment in time, it is still a positive trend, and it is still a bullish divergence.
Meanwhile, the VIX never got to its old highs either.
Meanwhile, the 10-year finally broke that nasty downtrend, and even the RSI is beginning to pop higher.
The dollar index is also stablizing and showing positive signs as well.
The spread between USDE10YR is also rising. To this point, this has been the only thing that has been working.
So, I ‘d hated to say it, but again, as long as yields are rising, spreads are widening, and the is dollar strengthening, and S&P 500 can stay above 2735, then the trend is higher. I know you think I’m crazy. But until we get a solid close below 2735, I’m not changing my view.
Now, remember, I am human, and a person. So that means there is a very good chance I will be wrong. Should I be proven wrong by the market, which has been happening a lot recently, be prepared for a drop even lower to 2635.
As a subscriber pointed out to me earlier today, Apple never made a new low today. As its RSI begins to turn higher too, more importantly, you can see it holding that long-term uptrend off the June 19 lows.
The patterns exist for Microsoft, no new low, and RSI turning higher.
Boeing has been destroyed, and if $183 isn’t the bottom then I’m sorry, because it is going even lower back to $158.
I think gold is heading lower, have you seen a chart of the 5-year breakeven inflation expectations. Not good for inflation, and that is not for gold, even in these times. Plus you have that nasty bearish divergence after failing multiple times at $1699.
Then, of course, there is this tremendous falling wedge pattern that is forming in the NASDAQ. But hey, maybe I’m drinking something.
And while you will probably never see this from me again, desperate times, call for desperate measures. I’m not a big Fib or Elliot Wave guy, I did study it a lot when I was young, and I just never liked it. But the 61.8% retracement level on the SPX from the December 2018 lows to the February 2020 highs, is right around here at 2,740.
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.