Stocks Drop On December 30, As Yields and Commodities Rise

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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DECEMBER 30, 2019

STOCKS: ROKU, TSLA, AMZN, BABA, SNAP

MACRO: SPY, GLD, YIELDS

MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN TSLA

S&P 500 (SPY) 

Stocks fell today with the S&P 500 dropping by roughly 55 bps to close at 3,222. The index did make it as low as 3,216, and it also managed to break the uptrend that has been working since December 3. Also, the RSI for the index managed to fall to 68.5 from 78.5. I’d take the RSI falling back to 56, that would please me. It would likely take the S&P 500 back to 3,180 to 3,200 range, and there would be nothing wrong should that happen.

S&P 500, spy

German 10-Year

The German 10-year bund did something it has done since June, that was close at negative 18 bps. It is a big break out for the interest rate, and suggests a further increase to negative 13 bps.

germany bunds

Spreads 

It doesn’t sound like much, but this one reason why the dollar is weakening. The spreads between US and German bonds have contracted considerably in 2019, and that is one reason why the dollar likely has even further to fall in the weeks ahead.

spread us and german bund

Gold (GLD) 

That is one reason why I have been getting bullish on the commodity sectors recently. I have been talking about the GLD since last week in my member areas, and the ETF is now very close to breaking out and pushing to $147. I happen to think it will break out. Premium content – Copper And Gold May Be Breaking Out

gold, gld

Roku (ROKU) 

It figures that after I write a positive article on Roku, the stock goes down. Sometimes you can’t win. Perhaps ROKU falls back to $122 now. Roku’s Stock May Rise Sharply Short-Term

roku, roku

Alibaba (BABA)

Alibaba fell out of the trading channel today, and now it is testing support at $211. It could result in the stock falling to around $201. 

alibaba, baba

Tesla (TSLA) 

Tesla also fell today, and it should not be a surprise, the stock can’t go up in a straight line. It is still overbought, and I think it probably falls back to $390 or so to test the breakout.

tesla, tsla

Amazon (AMZN) 

Amazon probably needs to pull back some more, too, perhaps to $1825.

amazon, amzn

Snap (SNAP)

I noted in an article for Forbes; I saw some bullish option betting in Snap, which could result in a rally to start 2020. Snap’s Rocketing Stock May Rise Further To Start 2020

snap,

The commentary should go back to normal on Thursday, January 2, with the return of both the morning and evening.

-Mike

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.     

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