Stocks Reach Major Inflections Points

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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July 13, 2020

STOCKS – UBER, PEP, PFE

MACRO – SPY, QQQ

Mike Reading The Markets Premium Content – $35/Month or $300/Year

Stocks are rising this morning around the world, with the KOSPI and DAX both up around 1% and Shanghai up nearly 2%. It is essential to recognize this because it indicates the rally here in the US is not alone. The big question is what phase of this rally are we in? Is the middle or nearing the end? Very hard to tell, of course, but what we do know is that a few of these markets are at inflection points. It means they continue higher or turn the other way. 

South Korea (EWY)

The KOSPI is at a multi-year downtrend that has seen the index fail multiple times over the years. So is this a significant level for South Korea? Yes. So is South Korea at an inflection point, yes. 

NASDAQ 100 (QQQ)

The QQQ is at an inflection point of there own. Either the ETF is in the midst of a change in trend, or is the upper part of the range. Either we are going sharply higher from here or sharply lower. I’m not sure there is an in-between.  Premium content – NASDAQ IS RIPE FOR A SIZEABLE DROP – WEEK AHEAD

S&P 500 (SPY)

The SPY is either about to break out or turn lower. The ETF is sitting at its own inflection point, which is the downtrend off the February highs. 

Pepsi (PEP)

Pepsi reported better than expected results this morning on the strength of its Frito-Lay brands. But guess what the company is giving no guidance. How I hope this isn’t the trend for every company this quarter. The stock is rising to resistance at $139.50, and just like everything else, finds itself at an inflection point. 

UBER (UBER)

Well, if you thought Uber was a riding sharing business, it is now only half a ride-sharing company, with food delivery the other half. I don’t know how that changes the stock valuation, but yes, something to think about. Given the virus, I believe that over time, we find that riding sharing continues to shrink as a percentage of the pie. I still think this one heads lower. 

Pfizer (PFE)

Pfizer is rising this morning on news two of its vaccine candidates will get FDA fast track destination.  So? Who cares? It doesn’t mean anything. So instead of taking 12 months for approval, it will take 6?! Why is the stock is trading up on this news. Any die-hard biotech investors must be so frustrated how this market reacts to non-news headlines, that move the entire market! I wonder if PFE can get above $34.90. 

Anyway, that’s all

-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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