Michael Kramer and the Clients of Mott Capital own Disney and Skyworks

February 5, 2019

• S&P 500 +3.6 points
• 10-Year Rate 2.73%
• Oil $55.06
• VIX 15.50
• Dollar Index 95.97

International Markets

• Japan -19 bps
• South Korea -6 bps
• China – Closed (Lunar New Year)
• Hong Kong – Closed (Lunar New Year)
• UK FTSE + 1.43%
• German Dax +1.23%

Key Events for February 5:

1. President Trump, Sec. Mnuchin and FOMC Chair Powell had an informal dinner to discuss the economy. You can read the Fed’s statement
2. President Trump to hold The State of the Union tonight.
3. ISM Non-Manufacturing: Estimates for 57.2
4. Earnings
   1. Tuesday PM
      1. Disney
      2. SNAP
      3. EA
      4. Skyworks
   2. Wednesday AM
      1. GM
      2. Take Two
   3. Wednesday PM
      1. Chipotle

UK

It is incredibly positive that the UK FTSE continues to rally and is breaking above resistance at 7,120. If the rally can hold and the breakout and push higher, then there is a path for the index to rise to roughly 7,270.

Germany

The German Dax is also nearing a breaking out with the potential to rise to 11,535. The chart below shows what appears to be a bull flag formation.

Overall international equities continue to power higher, and that continues to be positive for US equity markets.

S&P 500 (SPY)

The S&P 500 is likely heading higher again today, with the index rising above critical resistance at 2,715 and is on its way to 2,800. I see no reason why stocks can’t continue to rally today. The path to 2,800 seems fairly straight forward from here.

Semis (SMH)

The semiconductors continue to look very strong as well, with the SMH on a path to $101.

Technology (XLK)

The XLK technology ETF appears headed towards $69.

Industrials (XLI)

The industrial ETF is also nearing a pretty big break out should it rise above $73. It could be on its way back to $75.50.

Gilead (GILD)

Gilead is falling this morning after posting disappointing results. The stock is falling back to lower support around $66 this morning.

SNAP

Snap reports tonight, and the stock is nearing a potential break out. Should it rise above $7.30, it could go on to advance to around $9.

Skyworks (SWKS)

Skyworks broke out already and appears to be heading back towards $81.30

AMD

AMD’s run may be over with the stock falling below support at $24 and potentially on its way back to $21.

GM

GM has a bearish rising wedge pattern forming, and I am looking for a decline towards $35.

See you tonight!

-Mike

Photo From Flickr

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.