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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Today is Friday, January 18
- S&P 500 futures are pointing to a higher opening of 11 points as of 8:30 AM
- The US 10-year rate is at 2.77%
- Dollar Index is at 96.02
- WTI Crude Oil is $52.73
- VIX: 17.82
- Critical events for today: Netflix Reports better than expected subscriber growth, Industrial Production
- Hong Kong Hang Seng Index +1.25%
- Japan +1.29%
- China Shanghai Comp.+1.42%
- UK FTSE +1.49%
- Dax +1.46%
Global Break Out
There are clear signs of a global stock market rally taking grip. There are similar patterns taking place in Hong Kong, Shanghai, Japan, Germany, France, the UK, Korea, and Singapore. These are all major global markets, and they would suggest to me that global equity prices on the cusp of a significant rebound over the coming weeks.
The Hang Seng has firmly risen above technical resistance at 26,200 and is now quickly approaching another level of resistance at 27, 350
Tencent (700 HK)
Tencent is seeing a huge break out crossing over resistance at 333 HKD and could be on its way towards 367 HKD.
The Shanghai composite appears to be lifting towards resistance at 2650, from its current level of 2565.
The KOSPI appears to have put in a potentially firm double bottom, and rise above 2,140 sends the index on to 2,220.
The Nikkei appears to have bottomed and is heading towards 21,000
These are all major export economies and improving markets might suggest that the global slowdown or “soft patch” may be in the rearview mirror. If you look closely at the chart of Shanghai and Korea, they have both formed the same double bottom.
The S&P 500 as we noted yesterday rose above 2,630, and that level shall now act as support in the future. The chart would suggest that next level of resistance will come around 2,690.
Netflix is trading slightly lower today after the company reported results, which I still think they were strong. $335 will continue to act support. While a rise above $355 sends the stock on to $385.
Tesla is trading sharply lower today after the company said it was reducing its workforce by 7%.
Perhaps some people are trying to find something negative in this; I can’t see it. The company said, “In Q4, preliminary, unaudited results indicate that we again made a GAAP profit, but less than Q3.” Consensus estimates are for adjusted EPS of $2.28 and GAAP EPS of $1.46, which is less than last quarters of results of $2.90 and GAAP of $1.75. I don’t see anything to show it was worse than these estimates. Yes, it takes off the table a chance for a better quarter than last, but clearly, it was not widely expected to be the case.
The line “This quarter, as with Q3, shipment of higher priced Model 3 variants (this time to Europe and Asia) will hopefully allow us, with great difficulty, effort and some luck, to target a tiny profit.” doesn’t really tell me much of anything, other than what we already know, which is that there is not yet a smooth path forward.
Today’s sell-off seems ridiculous to me, as the update gives no clear sign of anything, other than the company is laser-focused on remaining profitable.
But hey, you need the negative headlines to get readership, so that is how it is presented.
The stock is still stuck in a range between $300 and $360. Nothing has changed.
Square continues to rise and could be on its way to $75. This is a premium article I wrote: Square’s Stock Is Breaking Out
Freeport McMoran (FCX)
Freeport McMoran continues to rise and now appears to be on its way towards $12.70.
Have an awesome Friday.
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