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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APRIL 8, 2020
STOCKS – AAPL, WORK, SQ, SBUX
MACRO – SPY, EWG, EWY
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL
Stocks are moving lower on April 8 around the globe, and are pointing to a flat opening here in the US. Again, I continue to think the recent rally we had witnessed to start the week was a short-term rally in a longer-term downtrend. It likely means we move lower still and perhaps towards that gap fill area around 2,270. Does it happen over a short-term period? I hope not; I have only built half of the list I want to add to my portfolio. The truth is, we want it to happen slowly. The market has been moving at an ultra-fast pace since October 2019, and these sharp moves higher and lower create these unstable periods of heightened volatility.
As I have been describing in the premium area, I have been breaking these stock market moves into phases, just like all the economic relief plans. The first phase was a pure shock that the virus was going to have a significant impact on the economy. The more recent rallies off the lows were phase 2, which was the relief rally on a receding virus threat. But we are now transitioning over to phase 3 as we enter earnings season. Phase 4 will be the realization that we are not in a V or U shape recovery, but something which I see more like the image below, a “LU.” Something between an “L” and “U.” There is nothing wrong with the shape, as I feel it is more sustainable, but not what anyone is looking for. Premium Content – Finishing Phase 2, Entering Phase 3? Mike’s Reading The Markets Premium Content $35/Month or $300/Year
- Finishing Phase 2, Entering Phase 3?
- Stocks Are Testing Big Resistance Levels
- Stocks Set To Rally, But Options Still Betting It Doesn’t Last
- Stocks Reach Critical Levels
- Stocks Are Jumping, Lots Of Bearish Options Betting
- Earnings Decline, Still Have Further To Fall- For The Week Of April 6
- The Next Live Webinar Will Be April 16 At 9 PM ET
- Unemployment Rate Understated, As Economy Weakens Materially
South Korea KOSPI
South Korea fell by about 90 basis points. The good news is that the KOSPI is trying to break a significant downtrend last night, but failed to finish the day down 90 basis points.
Germany is also trading lower today by about 1.4%, filling most of the gap higher from yesterday’s trading session.
S&P 500 (SPY)
The S&P 500 (SPY) ETF is trading lower today and holding to technical support at $263.35. Given yesterday’s sharp sell-off, I don’t think that level will stay for too long.
We see for now that the S&P 500 SPY ETF is also facing a downtrend at the moment as well. Again, I think we move lower from these levels with my target of roughly 2,500.
Apple’s price target was lowered to $335 from $350 at JPMorgan today. Meanwhile, Piper Sandler raised its target to $300 from $260. The stock has struggled along with every other stock, and the roll-out of its newest iPhone’s sure to be delayed. The stock rose to around $275 yesterday and failed, and is likely now on its way back down towards $235.
Slack has fallen back to $23.90 and is now likely to fall even further towards $21. Here was my original story on Slack.
Starbucks ‘ price target was lowered to $73 from $95. Again, as I noted last night, I think it falls to around $60.
I had noted earlier this week, I thought Square could retest its recent lows, and I still think that is the case. I believe that increase above the downtrend may prove not to last.
Have a great day!
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.