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Turnaround Thursday- S&P 500 Surges
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Big time rally today in the markets, suddenly the machines are working correctly again, maybe they needed a tune-up. Today’s action in the market has been noticeably different than days past. Today, we gapped higher, and kept moving higher, a big positive. I’m not entirely convinced though as of today, the rally is nothing more than a one day bounce. Should the S&P 500 rise through 2,595 I would become far more optimistic.
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Part of the skepticism still lies in the Technology shares of the XLK, which is still way above the channel, and is now just refilling the gap created around $64 on November 9. Again, the XLK has only traded outside of the channel on a few occasions and eyeballing the chart suggests this is the furthest we have risen above. So again, there is reason to still be guarded and cautious.
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Tesla
There are signs that risk is coming back into the market, and that means investors appear to be willing to take more of it.
Tesla shares are one such example, with the stock trading back to nearly $316, after being in the mid-$290 just a few short weeks ago.
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Biotech
As we noted yesterday, biotech has seemed to turn, with the Biotech ETF IBB firmly higher today, trading at $311. More importantly, as we said yesterday, the $303 level continues to act as a robust support level and the groups rise should only continue to gain momentum. One can see there was a surge in volume over the two days of trading when the ETF got around the $303 level. In fact, it would seem from looking at the chart $322 is likely the direction the ETF heads to next.
Celgene shares have now broken out with the stock rising above the $102.50 level, with the stock trading firmly over $103. The breakout is notable and extremely important to the health of the sector.
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Inflation Watch
Inflation is coming and it may catch the market off guard. The ten-year treasury rate continues to trade at levels in the 2.3 percent range. But recently Oil has been creeping up in price, and has broken out of a long-term trading channel which had capped Oil around $53 per barrel. With Oil currently trading around $55, it seems the trend is to continue higher, and approach a level of about $62, based on the charts.
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The chart above is an overlay for the price of Oil and the y/y percentage change in the producer price index for the last ten years. It doesn’t take much to see the incredibly tight correlation between Oil and the PPI y/y. This relationship is likely not to change anytime soon either. One risk in the market right now is whether a rise in Oil and inflation will catch the market completely off-guard.
The Ten-Year treasury also looks as though it is getting ready to break out with yields potentially shooting back to perhaps 3 percent, after a year of sideways consolidation.
Just in case you didn’t have enough to worry about!
Night!
Free Articles Written By Mike:
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Why GM Could Slide 10% After Bull Run
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S&P 500 May Pull Back, Setting Up 20% Gain By End 2018
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Michael Kramer and the Clients of Mott Capital owns shares of CELG
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Tags: #S&P 500, #Tesla, #Biotech #inflation #oil #celgene $tsla $tnx $celg $ibb #sp500 $spy
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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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Mott Capital's Market Chronicles June 13, 2025 2:08 PM