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June 4 – Stock Mentions: SPY, SMH, AAPL, TSLA, AMD, ROKU, INTC
Michael Kramer and the clients of Mott Capital own AAPL, TSLA
Michael Kramer owns SMH Calls
June 4 Was Turn Around For Sure
That worked out well for stocks. It turned out to be a turnaround Tuesday after all with the S&P 500 surging by over 2%. All it took was some dovish comments out of the Fed and China suggesting that the US meet it somewhere in the middle. So which is it? Is it the tariffs or the Fed the market cares more about? The Fed. I have been doing some thinking, and part of me believes that the market sell-off that started at the beginning of May may have had much more to do with the Fed and its May meeting. Remember at that time Powell brushed the low inflation rates off as transitory and wouldn’t so much as give the market a bone in terms of even being open to cutting rates. All it took was for Powell to say the Fed would be there if the economy slowed and the Market jumped.
I know many will throw cold water on the notion that the May sell-off was Fed-related, but don’t discount it. Remember the Market sold off reasonably hard following the Fed meeting, only rebounding after the strong April jobs report. If the market continues to rally in the coming days and weeks despite any progress on the trade front, we will likely find out the answer.
I have mostly kept these thoughts to myself because I didn’t have much evidence to support this viewpoint, but after today, I do feel more strongly that the May sell-off was just as much Fed-related as tariff related. Sure, tariff news didn’t help, and likely added about 1-3% extra to the sell-off. But before you cast my view as crazy, let’s give it some time to play out. Sound Fair? Good. I’m glad we agree.
S&P 500 (SPY)
Anyway, the S&P 500 managed to test 2,800 today even closing above it. But I noted in my premium video that before we get all excited, we need to see the S&P 500 close above that May downtrend line. Right now it sets up a resistance zone starting at 2812 and working its way lower. For me to grow even more bullish, we need to see that uptrend broken tomorrow and close above it on June 5. On Break Out Watch – But Not Yet
I have telling you for days to watch the semis, and that the SMH was screaming a bottom was in near. Sure enough, the SMH jumped over 4%. You can see that the SMH broke out today rising above resistance at $101. I think it opens the door for a rise to around $104 and perhaps as high as $106. I bought some SMH calls today, for full disclosure.
Apple was already on our radar, and today, the stock made its first move towards $182, and I noted yesterday in a premium article, the AAPL could rise to $195. Apple May Be Overdue For A Bounce
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Tesla also had a pretty significant rally on June 4, and it would appear that it may be breaking out too. Rising above resistance at $191.50, and breaking a downtrend. I noted today in a premium article TSLA could rally to around $205. Tesla’s Breaking Out?
In yet a positive sign for AMD, the stock closed for the first time above resistance at $29.40. Does that set up a rally to $31 now? It sure looks like it may.
Roku appears to be getting ready to break and move higher towards $100.
Intel looks like it may finally make that move to $46.
No blog in the morning, I have to take my dog in for eye surgery. Back June 5, Wednesday night.
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