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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Stock Market Sees Big Rally, This Time It Maybe For Real
I think it is time for the overnight equity future traders, to hang up the cleats and put the jersey away and call it a career. Either that or the Algo’s need some severe tweaking for the keywords they are searching in the headlines. It seems the direction of the futures on these big down days should not be trusted and should be treated as suspect.
But the clues were all around us before the first tick took place that the sell-off would not last.
Clue #1 – China
The first clue, the Shanghai Composite last night hardly budged on the news of the new tariffs. In fact, the algo’s in China appears to play the same game of fill the gap, as our algo’s. Are the duties imposed by China, and those imposed by the US only detrimental to the US economy, and immune to China? Of course not.
Clue #2 -S&P Futures Trader Wins Big, The Rest Should Go Home
Clue #2 came around 7 am when a huge block went off in the S&P 500 futures. Pretty much near the lows, and the rest was pretty much history. This same “institution, trader” has now pulled off a similar trade a few times since the February lows, and each time the market has rallied. My guess is that it is the same institution because it has happened around the same time of the day on each occurrence.
I even posted a tweet about it, as soon I saw it!
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Remember I said I wasn’t getting fooled on the next rally until I saw the XLK breakout, well today it did!
The S&P 500 broke out above two downtrends. The next test comes around 2,675, then 2,690.
Google broke out too, a rebound back to 1,080 could be on the way.
Facebook has seen $151 hold like a rock on multiple occasions, I still think it moves up to $166.
Intel bounced right off support and looks like it going over $50.
Micron broke out too and is likely turning back towards $56.
While the Tesla bears had their moment of glory, and just like that, it’ is gone. Sorry guys, hope you enjoyed it.
Remember to watch out for those future traders tomorrow morning, but at least the next time you will be looking for confirmation in other markets.
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Michael Kramer and the clients of Mott Capital own NFLX, GOOGL, TSLA
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Tags: #sp500 #tech #technology #facebook #google #tesla #micron #intel #futures #equities #stocks