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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STOCKS – SHOP, TWLO, ROKU
MACRO – SPY, QQQ
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S&P 500 (SPY)
Stocks rose again today by 1.2% as the quarter draws near its conclusion. Tomorrow will mark an exciting day, especially with that gap at 4,660 potentially filling, which is also the 78.6% Fibonacci retracement level. At this point, I would like to see what happens once that gap is filled. To have come this far and for that gap not to be filled. If the gap fills, and there is a sharp reversal Intraday, I think that says a lot about the market and where it goes next.
Can the rally continue to new highs, should the 4,660 resistance break? From a logical standpoint, it should not. There is no more fiscal stimulus, monetary policy has shifted, rates have risen, growth has decelerated, and PEs are too high again.
But stocks tend to trade more with emotion than common sense. However, if real yields keep pushing up, I don’t see how stocks don’t have a very sharp reversal in store for them.
Shopify has come this far; it might as well fill that gap at $865.
Roku finally broke that long-term downtrend and has a nice gap to fill up to $146.
It took forever, but Twilio finally filled the gap $121.
Mott Capital Management, LLC is a registered investment adviser in the State of New York. 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. Please remember that past performance may not be indicative of future results.