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.
Otherwise, enjoy the column!
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September 11 – Stock mentions: SPY, IWM, JD, AAPL, TSLA, BB, AVGO
Michael Kramer and the clients of Mott Capital own TSLA and AAPL
Some recent Macro videos in my SA Marketplace RTM, first 2 weeks free
- Why Stocks May Be Poised To Rise Even More
- Risk Aversion Trade Unwinding Fast
- The Invert Yield Curve Explainer
- My Process Revealed
Don’t forget that tomorrow is the big day. Tomorrow we see Mario Draghi for the last time as ECB president. It should be interesting to see if he pulls the trigger on more QE. I know that yields have been rising, but consider where they are now, versus where they were a few days ago, and where they had been in July. German yields are currently negative 55 bps, they had been at negative 70 on September 4, and in July they were as high as negative 20 basis points.
I think he will cut the deposit rate, and he will do QE, a rate cut alone won’t accomplish what he wants, and that is a weaker euro. Remember the last round of QE was €80 billion a month. Could be a €100 billion a month? I don’t know, but it has to be bigger than what the market is expecting.
The market is expecting something in the range of a 10 basis point cut in the deposit rate and QE of €30 to €40 billion. Even with these expectations the euro is trading around 1.10 to the dollar and hasn’t moved. Don’t be surprised if you see a QE number greater than €50 billion euros that is my guess.
The circle is when Draghi took his position.
Russell 2000 (IWM)
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Stocks had a strong day with the S&P 500 rising by roughly 70 basis points to close right at 3,000. But, it was the small caps that drove prices higher, with the Russell rising by 2.1%. The index has been on fire since August 28, rising by over 8.3%. Now the index is nearing a potentially massive break out. One that may send the index, I think, back to its all-time highs last seen in September 2018, around 1,700.
There is currently a triple top in Russell right around 1,600, and I don’t see how the index will fail for a fourth time at that level. Everything seems to be going in its favor at the moment. Plus I can’t say I have seen many quadruple tops in my lifetime.
Also, the RSI broke the downtrend, suggesting that bullish momentum is now moving into the index.
Additionally, the number of total stocks now trading above their 50-day moving average is about to jump higher too, over 65%.
Yes, also the Nasdaq rose above resistance at 8,110 and is likely moving back to its all-time highs.
Some recent articles on Stocks in my SA Marketplace RTM, first 2 weeks free
- Netflix Still Has Some Life Left
- AMD Stock Is Looking Very Weak
- Betting Square Falls
- Why Freeport And Copper May Be Heading Higher
I know the big question on everyone’s mind tonight has to be if JD.com will ever rise above $31.50 again. Every time the stock gets here, it just stops. The rising triangle suggests it does break out this time.
Tesla had a very good day, not sure if I am missed something or not. The stock jumped by almost 5% and is within striking distance of $253. Volume was stronger than average too. It is coming to that time of the quarter where emails start getting “leaked” about production and deliveries. I guess we will see what the next few days bring.
Apple had an awesome day, too, rising over resistance at $222. It would seem the all-time highs at $234 are its next significant level.
Blackberry got back to $7.50; now the next big test comes at the downtrend around $7.80.
I almost totally forgot that Broadcom reports tomorrow. Where does the time go? It looks like it broke the downtrend just at the right time then. $307? I guess we find out tomorrow afternoon.
Have a good one
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.