S&P 500- Next Leg Higher

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 to get the Daily Monster Market Commentary and join the 2,935 subscribers getting it for FREE!

Mott Capital May 2017 Performance Report

Here is a basic chart of the S&P 500 I just threw together tonight. You can see in the upper right corner, the S&P 500 has been consolidating nicely in this 2430 level. It seems to indicate the index is likely to break higher in the near future.

Premium Content: Boring Is The Best Thing For This Equity Market

We can also see that the 10-Year Treasury rate is filling the gap created in the days immediately following the election.
^TNX Chart

^TNX data by YCharts


Investors point to the falling sign of the 10-2s and the flattening of the curve as a sign of a slowing economy.
10-2 Year Treasury Yield Spread Chart

10-2 Year Treasury Yield Spread data by YCharts

Subscribe to the MCM Stock Market Commentary to get it Daily and join the 2,935 subscribers getting it for FREE!

Again, much of this is wrong, in my opinion. The 10-2 spread is contracting because the gap is being filled on the 10-year, while the rates on the short end of the curve have been rising steadily in anticipation of more rate tightening.

The last reading for the Atlanta Fed’s GDPNow was 3.4 percent GDP for the Second Quarter of 2017.  The next reading is on the June 9.  Does that sound like a recession is coming?

Continued economic growth, will result in the yield curve likely to begin steepening again. Which is a positive for equities.


This next chart is a preview for tomorrow.

Sign-up to get this in your inbox.

Equity Articles Published on Investopedia:

It WIll Not Be Easy for Nvidia to Get to $300 (NVDA, INTC)

Valeant Still Has A Big Debt Problem (VRX)

Apple’s Curse May Be The Success of The iPhone (AAPL, AMZN)

Alibaba Is Growing Faster Than Most Thought (BABA)

Disclaimer: Michael Kramer is the Founder and Portfolio Manager of Mott Capital Management LLC, 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 recommendation made during the past twelve months. Past performance is not indicative of future performance.

Read more: It Will Not Be Easy for Nvidia to Get to $300 (NVDA, INTC) | Investopedia http://www.investopedia.com/news/it-will-not-be-easy-nvidia-get-300-nvda-intc/#ixzz4jSsiYqAq
Follow us: Investopedia on Facebook