May 23 – Stock Mentions: AAPL, QCOM, JD, BABA, MU

Michael Kramer and the clients of Mott Capital own AAPL

US Markets

• S&P 500 Futures -29 points
• 10-Years 2.35%
• Oil $60.43
• VIX 16.67
• Dollar Index 98.21

International Markets

• Japan Nikkei -0.62%
• Shanghai -1.36%
• Hong Kong HSI -1.58%
• South Korea -0.26%
• Germany Dax -1.84%
• UK FTSE -1.33%

Trade war, trade war. It’s old; nothing has changed. It took me a good 20 minutes to figure out exactly what was even said that is causing these “tensions” on May 23. It seems the China commerce ministry made some comments regarding the US correcting its “wrong actions first” before there could be further negotiations. We are stuck in the “trade war” nonsense for some time longer. How much longer until the G20?

The setup going into today is certainly not what I expected based on the direction of the pre-market and global markets. So while today has the potential to be one of those days that feel bad, when we take a step back and look around the globe, the markets are doing nothing more than marking time.

Korea

As we can see, the South Korean KOSPI appears to be “attempting” to bottom out.

Shanghai

The Shanghai Composite looks nearly the same.

Germany

The Germany DAX? Same. Except remember today across Europe are parliamentary elections. Believe it or not there other things that are happening in the world. Throw in some weak PMI and you get a down day in Europe. No matter, blame it on trade tensions, it sounds better and makes for scary headlines. Although PMI’s and election uncertainty may have more actually do with it.

So despite all of the “trade tensions,” daily nothing has changed, and the market has gone nowhere.

S&P 500 (SPY)

When we look at the SPY chart, we can see that the S&P 500 is set to open below the uptrend and that doesn’t look like a good thing. I was expecting “something” to happen today, but my expectations were for the market to rise. As of now, we need to deal with the prospect of the market going lower. Unfortunately, we now need to see how the day plays out and where the S&P 500 closes.

One thing to keep watch for comes at 9:45 when we get our own Flash PMI’s

Russell (IWM)

We can see that the IWM is also sitting on a critical level of support today at $151. So again, while the opening of today’s session looks dire, it is hard to says at this point that much of anything has changed anywhere around the world.

We will be in a better position at the end of the day to determine what is happening.

Apple (AAPL)

Apple continues to fall under the weight of trade worries. One has to wonder just how much China will let Apple sales slip in the country before the government allows its people to know it is still “ok” to buy Apple products. Apple indirectly employees 100’s of thousands of people in the country. I don’t think it would be ideal if all of those people started to lose their jobs? At some point, there is a floor? I doubt that sales in China go to 0. But then against then again, it is a communist country with a President for “life.” Don’t forget that.

Qualcomm (QCOM)

Qualcomm is falling after being downgraded today by Mizuho. The stock is likely to feel some pain for a while longer as investors assess the damage of the FTC decision. $65 is a big support level because the next significant level is around $58.

Alibaba (BABA)

Alibaba is getting closer to my $150 target.

JD

JD is breaking below $27.50 on its way to $26.

Micron (MU)

Micron is clinging to support today at $34 and could be on its way to $32.

Good Luck! Your gonna need it!

-Mike

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