Rates and Oil May Be The Canary In The Coal Mine

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.

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July 10, 2020

STOCKS – BYND, BA, BABA

MACRO – SPY, QQQ

Mike Reading The Markets Premium Content – $35/Month or $300/Year

Stocks are pointing to a slightly lower opening on July 10, but it’s the 10-year yield that is what should be on watch. The yield is 57 bps this morning and its lowest level since mid-April. It is just a couple of basis points away from support at 55 bps. A drop below that level sets up a much steeper decline potentially to the lows last seen in March.

Oil 

Meanwhile, the gap in oil has closed around $42 and is now at risk of turning lower, potentially back to $34.

S&P 500 (SPY)

Meanwhile, the S&P 500 futures continue to find support at 3,115, so as long as that level holds, the bulls have a shot of a rally. However, a break below that 3,115 support likely opens up a further decline to 3080. 

Nasdaq (QQQ)

Meanwhile, the Qs are still in the danger zone at the upper end of the trading channel. Again, as it has been the correct view the prior five times, when the Qs reached this end of the channel, there is a sharp drop back to the lower end of the channel. To this point, there is nothing to suggest this time is different. 

Beyond Meat (BYND)

Beyond Meat was initiated with a sell rating at Citi and a price target of $123. The stock has support at $136 and the potential to fall to around $124. 

Alibaba (BABA)

Alibaba has gone vertical on the big rally over in China, and the stock is getting stretched at this point and overbought. There is a good chance it consolidates lower to $230. 

Boeing (BA)

Boeing is approaching support at $165 and is nearing a potential further break down to $127.

Have a great weekend!

-Mike

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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