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Stocks Get Crushed on June 25 as Risk Turns Off – For Now!

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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF GOOGL, NFLX, TSLA, V

Well, what happened to 2,800? That is what I want to know. Just yesterday, I was thinking we would get over 2,800 this week, now I’m wondering if we are gonna stay above 2,700.  I am confused, Yes! I feel more stupid than anything because I was caught totally off guard. It happens though, we are all human, and we are all wrong! I did not see today coming. It figures though, it is the last week of the quarter! (See: 6 Stocks to Watch For The Week of June 25)

The good news, the S&P bounced where it was supposed to, right around 2,700.

Profit Taking

But It feels more like a day of profit taking or taking whatever profit one has left after today. You can blame a part of the sell-off to trade tension sure, like the chip stocks, industrials, etc. But those FANG stocks, they were the ones that everyone was flocking to for trade tension safety, but those got rocked. Perhaps some end of quarter rebalancing here? Maybe.

Netflix

Netflix shares were down nearly 7 percent! Sure we all knew this would happen at some point, we kept saying the run-up was too fast. But it sure is a painful drop. As we noted yesterday those subscriber trends are still mighty strong for the company going into coming quarterly results. Could Netflix fall to $360, sure? Will I be upset? No. Because I still think Netflix still has many years of strong growth ahead of it.

Alphabet

Alphabet got hit hard too on Monday, falling by over 2.5 percent. Notice how it falls right to the downtrend support level, and then the bounce. Interesting. Does mean anything, I’d like to think it does, but I honestly have no clue.

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Amazon

Amazon blew through support at $1680, and that likely means a drop of a bit more, perhaps $1620.

Intel

Intel is hitting $50.50, and this becomes a big level for Intel, that it needs to hold. It was one of the first of the stocks to start selling off over the past few weeks, so we will want to see if it starts showing a sign of a bottoming process.

Apple

Apple is still around support of $180, just like we had noted yesterday.

Nvidia

Nvidia, fell right its technical uptrend line, surely a good sign if can hold.

Boeing

Boeing is getting closer to our $320 target.

Visa

Visa also fell right to support at $129.

Tesla

If I told you the Tesla was flat today would you believe me? Probably not. But it sure was. Amazing.

So which way does the market continue? Interestingly, I think I would be surprised to see this type of sell-off continue. It feels like more of a risk-off and a cleansing day for some overcrowded positions.  If you remember we saw days like this last summer if I recall it happened around 3 to 4 times.

What seems the most encouraging to me is that for the most part, the key levels of support have held fairly well. I think that would suggest that at levels there are people willing to step in buy shares.

Well, see what happens over the next few days. At this exact moment in time, I’m not ready to stick my neck out and make any bold calls.

 

Good Luck

-Mike

Photo Credit via 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.

#sp500 #amazon #netflix #alphabet #intel #tesla #visa #