Stocks Plunge On January 27, As Volatility Surges

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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JANUARY 27, 2020

STOCKS: JD, NVDA, WDC, ROKU, DIS

MACRO: SPY, VIX, YIELDS

MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN DISNEY

Markets around the globe are sharply lower, with much of Europe down by 2% or more, and the S&P 500 futures pointing to a decline of about 1.5% to start the day. However, much of Asia is closed due to the Lunar New Year, and that maybe adding a layer of uncertainty as well.

S&P 500 (SPY) 

The most important thing for the S&P 500 at this point may be the trend line, which finds its origins back to the beginning of October.

A break of that trend line would suddenly make the pullback from something minor to something more severe. It could result in a drop back to around 3,200, to start. Let us hope the Futures can find a bounce at support around 3,230.

DISNEY, DIS

VIX

The VIX is surging above 17 to nearly 19. It looks like our VIX options traders are going to do alright for themselves. Premium content – VIX Betting Suggests Volatility Spikes Mind you; I had been seeing this increasing option betting well before January 21. The chart appears to suggest the VIX could rise to around 22. 

VIX

10-Year

We see a flight to safety into the 10-Year bond with yields dropping to1.6%.

bonds yields

JD (JD)

Stocks like JD.com are falling sharply. I had been looking for the stock to rise to around $44, but it never made it quite there, instead only reaching $42. Now shares appear to be heading the other way, as the shares search for support around $36.40. Free article – JD.Com’s Hot Run May Not Even Be Close To Being Over

jd.jd

Nvidia (NVDA)

Nvidia is another stock I saw rising to around $268. Instead, it only made it to only $259.50. So again, another stock that got close to my target but now moving the other way. I hate it when stocks get close to my 2.5% margin of error and fail without crossing the boundary, but such is life. Free article –Bets Being Placed Nvidia Rises Following Results

Now the stock will need to try to hold $236.

nvidia, nvda

Disney (DIS)

Disney is cracking today, and it seems like the stock is going to head back to $132. People are not going to be going to Disney Shanghai since it is closed, and with the virus spreading, it could surely affect other Disney theme parks, and maybe even the movies. Ugh. Free article – Why Disney’s Stock May Jump Following Quarterly Results

Disney, dis

Roku (ROKU) 

Roku is breaking through support today at $128, and that could mean the stock is heading towards $116.

roku, roku

Western Digital (WDC)

Western Digital is also falling, and it will need to hold support around $66, to avoid a further decline to perhaps $61.30. Again, another stock I had seen rising to around $76. It only got to $72. sucks. Free article – Western Digital Is Nearing A Significant Break-Out

Western Digital, wdc

Good luck today!

-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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