Stocks Rise On December 29 But Trouble Lies Beneath

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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12/29/21

STOCKS – AAPL, MSFT

MACRO – SPY, QQQ, DIA, IWM

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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL AND MSFT

Stocks finished the day slightly higher, with the S&P 500 rising by 14 bps and the Qs finishing lower by one bps. A lot is going on in the market, even though it seems like a whole bunch of nothing.

NASDAQ

I think the most critical chart starts with the NASDAQ Composite, with the index trying to break above critical resistance two days in a row and failing. There is an apparent and powerful resistance at 15,850, and it has held firm to this point.

It may look like a double bottom pattern to some, and it could be. But I would caution that this does not work out as a double pattern, and failing again at 15850 would likely drop below the index below the previous lows. I remember this setup very well from the 2018 drop, with the perceived W pattern.

Is it a perfect match? No, of course not, but I think it just tells you that if you don’t get a break out by tomorrow or Friday, good chance we are going much lower.

DOW JONES (DIA)

Today, the Dow Jones Average climbed right to the prior high on November 8 and stopped. So like the NASDAQ, a critical level to be watched tomorrow, with failure leading to more weakness.

RUSSELL 2000 (IWM)

Meanwhile, the Russell 2000 has risen right back to the trend line and failed.

Apple (AAPL)

Meanwhile, the same story for Apple, trying to make a new high, but has been unsuccessful.

Microsoft (MSFT)

It is the same story for Microsoft.

Anyway, that’s it; I am still working on a reduced schedule this week 🙂

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. Past performance is not indicative of future results.