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!
Subscribe to the Monster Stock Market Commentary and join the 2,533 subscribers getting it for FREE every day!
- Video: Today’s Rally Not Likely To Last
- Midday Note- Not Believing In Today’s Rally
- Morning Notes: Zoom And Acadia Updates
Stocks had a great day, with the S&P 500 climbing by 1.4% and the Qs climbing by almost 4%. Very strange to see, especially after the selling witnessed on Monday. In fact, today’s move higher, I expected on Monday. But it happened none-the-less.
This really started overnight in Asia, when it seemed the Chinese communist party was not pleased with the weak price action in their markets. That put a bid in Asian stocks, and well, S&P 500 futures spiked as well, and it seems to have just carried over.
The index struggled at 3,900 all day, and it proved to be too much for the time being. A big sell imbalance on the close, more than $3 billion, pushed the index about 60 bps off its highs.
S&P 500 (SPY)
A lot of what happens next will be dependent upon CPI data tomorrow morning. If the data is hotter than expected, it could easily wipe out many of today’s big gains. It would not surprise me for the index to give most of these gains away over the next few days and close the gap from this morning’s move higher.
The trend in rates is higher for now, but a breakdown could give the S&P 500 and technology stocks some relief, sending the equity market even higher. If CPI comes in hot, the 10-year would likely overtake 1.6%. There is the possibility of an ascending triangle forming, which would suggest yields move higher. But we won’t know until tomorrow.
Nvidia had a strong day, coming back from oversold conditions. The stock reached a level around 30 on the RSI and fell below its lower Bollinger band yesterday. Based on that, there could be a little bit higher to climb, perhaps back to $520.
Amazon had a strong day too, but couldn’t manage to make it past resistance at a price around 3,070. The stock isn’t as oversold as others, so it may not have much further room to run.
DocuSign is another stock that could have a bit further to climb, perhaps back to $226.
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.
equivalenta person or thing equal to another in value or measure or force or effect or significance etcMore (Definitions, Synonyms, Translation)