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Micron Underwhelms, Tesla Put To The Test, and Boeing Heads Lower

Micron Underwhelms, Tesla Put To The Test, and Boeing Heads Lower



Micron Underwhelms, Tesla Put To The Test, and Boeing Heads Lower

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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF ALKS AND TESLA

Happy Summer Solstice!

The S&P 500

The S&P 500 finished lower by about 60 bps and pretty much killed my theory we would cross 2,800 this week, but it does not change my longer-term viewpoint, that we will continue higher this year.

We retested the lows seen on the 19th right around the 2,743 at support, a good sign that the index held and bounced. The good news is the index continues to hold essential levels.

spx

NASDAQ

The NASDAQ also found some help at key support levels as well.

ixic

Banks

Moving on to sectors, Banks continue to struggle, and most of the banks were trading lower after the stress test results tonight.

financials


Industrials

Industrials fell below essential support, and the uptrend, which has been in place since the election of 2016, as the reflation continues to unwind. (See: The Reflation Trade Is Dead, Plus Micron, Roku, Netflix, and Biotechs)

industrials

Boeing

Boeing is a perfect example of how quickly things have changed. It was just last week that we were talking about big options bets that Boeing would continue to rise and how it looked poised to break out. But the sellers were unwilling to let the stock climb much above $372. (See: 3 Stocks Set To Rip, and 4 Stocks Set to Dip)

Now share look set to ready to fall to $319 with no support in between.

boeing

Materials

The materials look no better.

materials

Biotechs

Biotechs did get hit hard today, but this look more like a technical gap refill, then anything fundamentally wrong.

xbi

Alkermes

One biotech that got crushed, that I happen to own is Alkermes, on a decidedly bearish note from Morgan Stanley. Accord to this guy,  Vivitrol sales, their drug for opioid addiction, are slowing, While the outlook for two keys medication in the pipeline with events later this year, do not look promising. Whooo! Talk about bad news! I mean geez. Did I sell? No, because I happen to disagree with his outlook. I have owned these shares for nearly four years now. Biotech investing is the hardest sector to invest in, period. If you don’ have the stomach to handle the volatility, then you shouldn’t be in the space.

alkermes

Tesla

The Tesla short are testing support at $346, and the nerve of the bulls. Tomorrow may be telling, who has more conviction.

tesla

Micron

Boy, I’ll tell you, trading and investing so freakin’ hard. Micron posted outstanding numbers, got a bunch of upgrades, and still an underwhelming performance. Like I said last night don’t get all excited yet. What happened by day’s end? Most of the significant gains were gone. Was it a gap fill? It looks like one.  To be honest, this was such an underwhelming performance, and until proven otherwise, with a solid rise above $62, the trend is lower.

Please do not go posting Fake News, saying I have been a bear in Micron since January, or some BS. I noted the break out in Micron on May 9. (See:  Stocks Really Breakout, A Look At Roku, Where Does Oil Go)

Does my point of view change on Micron or any stock from time-to-time, of course! This blog isn’t just about investing, but trading. Do you want to trade with the big boys? Then you better be willing to change your mind and make a decision fast! You never know when you are going to get that call from a sales-trader, with a seller of 500k share, ready to shove them down your throat, with more to go.  The one thing you can’t do is crap your pants!.  Make a decision.

micron

And with that, good night!

-Mike

Photo Credit via Flickr

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. 

#biotech #banks #industrials #boeing #materials #alkermes #tesla #micron

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The Reflation Trade Is Dead, Plus Micron, Roku, Netflix, and Biotech's

The Reflation Trade Is Dead, Plus Micron, Roku, Netflix, and Biotech’s



The Reflation Trade Is Dead, Plus Micron, Roku, Netflix, and Biotech’s

MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF NFLX
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The Reflation Trade is Dead

If you haven’t seen this chart before, then take a close look at it. It is a comparison between the Nasdaq and Dow Jones Industrial since November 8, 2016. Of course, that was the day of the US election, and when President Trump was elected. It unleashed a wave of optimism that his pro-growth economic policies would stoke growth in the US economy, causing a spark for inflation, interest rates on bonds to rise, while significant tax reform would boost corporate earnings. It was nicknamed the “reflation trade,” centered around the bank, material, and industrial stocks

The chart below shows just how tight the correlation between the NASDAQ and the Dow were for almost two years, until, May, then something changed.

^DJI Chart

^DJI data by YCharts

The next chart shows the reflation trade is dead and is rotating into the risk-on, growth parts of the stock market, namely technology, biotech, and consumers.

I talk about this in my member video today, and went through why I believe this is happening, and what it means for these groups in the coming months.

I think overall, quickly, the divergence is only going to widen throughout the balance of the year.  You can watch the whole thing here, and you can get the first two-week’s free, so if you don’t like the service, cancel it. I won’t be insulted if you think it sucks!

XBI Chart

XBI data by YCharts


Micron

Microns results looked good all-around from my point of view. Shares were trading up some after hours to $60.50. I know I said I thought shares might go lower after results, and to this point, I’m wrong, yes. But let’s see how it trades tomorrow before we get too excited.

Remember after-hours trading is always tricky, and the stock traded about 10 million shares tonight. I know 10 million seems like an awful lot, but it is only 1/5 of today’s total volume of 56 million, and its 50-day average volume of 49 million.

An increase above $64 is a huge deal, and likely sends the stock back into the low 70’s. But tomorrow’s trading will be critical.

micron

S&P 500

The S&P 500 was up about 20 bps, but again clear divergence amongst sectors, with Financials and Materials down, and Industrials flat. Meanwhile, Biotech continues to soar, up over 2.3 percent, after a robust technical breakout, yesterday. Technology and Consumer were also better on the day.

I like that the S&P 500 retook support at 2,761. It is a positive. I know I was looking for 2,800 this week, and there are still two days for that to happen.

spx

There is no surprise I’m sure if  I tell you that Netflix, Amazon, and Facebook all hit new highs today.

Biotech

The Biotech XBI ETF reached new heights today as well, after its big breakout yesterday.

biotech

Roku

Roku shares got right up to resistance today and backed off. A rise above $48.20 probably sends towards $52.

roku

Netflix

 

So like if Netflix hits $425 tomorrow, what happens next? I mean really? I have no clue.  But if the last breakout resulted in a $133 point gain, like the previous, then this one takes it $466. We’ll see.

netflix

Inflation Watch

It would seem to me the dollar broke out. Keep an eye on oil.

dollar

Banks

You better watch those banks tomorrow, big stress test results. Is anyone really expecting some of the banks not to pass the stress test?

The falling triangle is just getting smaller and smaller. You know my thoughts.

banks

 

That is it, folks! Night

-Mike

Photo Credit via Flickr

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. 

#biotech #technology #rotation #reflation #trade #Stocks #micron #netflix #roku #banks #dollar

 

Final Look at Micron, Starbucks' Game Over, Plus GE, Oil, and Biotech

Final Look at Micron, Starbucks’ Game Over, Plus GE, Oil, and Biotech



Final Look at Micron, Starbucks’ Game Over, Plus GE, Oil, and Biotech

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There remains this overall resiliency in the stock market, and I think for the most part that was has been demonstrated by the S&P 500 gapping lower at the open the past couple of day only cut those losses by days end.

Biotech

Biotech stocks had a solid day, with the XBI Biotech ETF finally breaking out.  Most of the significant gains can be attributed to Sarepta which was up nearly 40 percent, to $144. I remember it was about two years ago this stock was below $10, and everyone had on the brink of disappearing. The turn around has been amazing.

Spark also broke out today, rising above $83.20.  The breakout could trigger a rise to about $91.

once


Micron Final Thoughts

Micron’s stock seems flat going into these results tomorrow night; I haven’t even been seeing the big options bets I am used to seeing in this stock.  The chart has no upward momentum in it, the relative strength index is trending lower, and volume has been on the light side.

The company is going to have to report much better than expected results tomorrow, and I’m not sure if that is possible given that they just provided upward guidance a few weeks back.  My guess, we see $54 before $61.50.  You wanna hate me for it, that is fine. I’m just giving my opinion.

micron

Starbucks

Starbucks reported tonight out of left field they are looking for a fiscal third quarter same-store comp of 1 percent. After last quarter results, I was convinced that all the growth in this story was utterly gone which was why I sold the stock. Today I’m glad I did. For them to be looking at a 1 percent comp. It likely means traffic is below zero, meaning it is declining, and ticket sales are around 2 percent, that is my guess.  The China story is nice but is simply not growing fast enough to offset the losses in North America.  I’m sorry. I guess I’m Mr. negativity tonight.

GE

Since we are dumping on companies tonight, we might as well throw in GE.  I was afraid this day would come, and today it did, with GE is officially out of the Dow. Imagine how much higher the Dow would be if GE hadn’t been in the DJIA over the past year.  There is nothing to like at this point in this stock, maybe in another quarter or two sentiments will turn, but that time is not now. Don’t try to be a hero, don’t got bottom fishing.

Dollar

The dollar broke out today, and that means a rise to 98 on the dollar index is likely on the way.

dollar

Oil

And there goes Oil, should I say it? Ok. Oil will see $61 before $70.

oil

Yields

10-year yields closed below 2.9 percent today. Meanwhile, the 10-2 year spread is now at 35 bps. So the Fed still wants to raise two more times? Can you say inversion if they do?

10year

That is it, folks! Night

-Mike

Photo Credit via Flickr

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. 

#biotech #breakout #sarepta #ge #starbucks #micron

 

 

Where Did All The Bears Go? NASDAQ Hit All-Time High

Where Did All The Bears Go? NASDAQ Hits All-Time High



MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF GOOGL

Where Did All The Bears Go? NASDAQ Hits All-Time High

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We do not follow the NASDAQ much here, but today the NASDAQ closed at an all-time high. Where are all the bears now? Where are all the people calling for the end of the bull market, and the days of doom and gloom?  Or the Investors that thought earnings would not matter?  Nobody knows the future, but we can surely use the information at hand to gauge the likely direction for the markets.  So yeah, tracking trends, earnings, and macro forces really do matter. Don’t let anyone tell you otherwise.

^IXIC Chart NASDAQ ALl-time high

^IXIC data by YCharts


Rotation Continues

Stocks continue higher today after the S&P 500 broke above resistance at 2,741, I think this now gives the index a clear path to go on towards 2,800 over the next couple of weeks. It has become clear, in case I haven’t made it obvious, risk-on is back in the equity market, and Technology continues to be the leader.

sp500

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Technology

Technology stocks continue to rocket higher, and with the ETF now trading at all-time highs there are no immediate resistance levels in place. Nvidia is the latest technology stock to breakout, with shares rising above resistance, at $260.50. Alphabet also broke out rising above a multi-month downtrend, rising above $1,140.

google


Biotech

Biotech has also been among the best sectors, but today it was down 22 bps. It isn’t bad considering one of the leaders in the group Nektar got decimated falling by an astounding 42 percent, yeah, that was just today. The data that the company presented at ASCO, a cancer conference, was less than inspiring and created more questions than answers.  In this case, the chart doesn’t help and doesn’t even pay to look at. I suspect it isn’t done falling, either. That is my guess.

Gilead

Gilead had a good day, as we noted in the Sunday write-up, the case for $72 is in the works.

gilead

Biogen

Biogen continues to struggle at $300.

biib


Oil

Oil prices fell again today, below $65, and I now think there is a good shot for Oil to head lower towards $61.

oil

Thanks to all the loyal readers, and I hope if anything I have helped you through the recent market volatility. I know in the stock market one can never declare victory, but occasionally, it is nice to acknowledge when you have had a good run.  I think we have put together a solid run of late.

If you enjoy these write-ups, please feel to share with friends or peers via social media.

Thank you!

-Mike

 

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Why Broadcom’s Stock Is Poised For Bigger Gains

Tech Stocks Seen Rising to New Record Highs

Twitter’s Stock Seen Rising 14%

Tectonic Shifts In The Stock Market (paywall member area)

© 2018 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

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-Mike

Photo credit via Flickr

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. 

Tags: #alpahbet #nvidia #technology #nasdaq #biotech #technology #oil

Amazon's Stock Nears Big Break Out, While Micron's Stock Gets Crushed

Amazon’s Stock Nears Big Break Out, While Micron’s Stock Gets Crushed



Amazon’s Stock Nears Big Break Out, While Micron’s Stock Gets Crushed

© 2018 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

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michael kramer and the clients of mott capital own shares of googl

Stocks continue to churn, with the S&P 500 down about 70 bps today, giving up some the gains from yesterday. But as we noted yesterday, there is a clear rotation going on in the marketplace, because today’s best sectors were Technology and Biotech, while Industrials and Financials struggled. Staples were lower today, and I think this more of a reflection of the imposed tariffs put in place, the likelihood of retaliation from other countries, and the potential impacts on sales and expenses.

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Tectonic Shifts In The Stock Market

Biotech

Biotechs continue to advance with the biotech ETF XBI increased to roughly $95.60,  about $2 beneath its all-time. Amazing. It wasn’t so long ago that the ETF was sitting at $85

biotech chart

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Technology

The technology group is also moving higher, and I decided to redraw the pattern in the chart of the ETF XLK.  It is still a bullish pattern, and I still think the sector continues to rally higher.

technology stocks


Alphabet

Alphabet was one the stocks that jumped today, with shares up almost 3 percent. I think the stock still has further to rise, maybe towards $1,125. A rise above $1,125 would be a significant development and substantial positive for the stock going forward.

alpahebt

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Amazon

Amazon is breaking out, and I do think it likely has substantial room to rise ahead on towards $1850.

amazon


Gilead

Gilead shares also look as though they are consolidating nicely, and it appears to have a flag pattern. It could help share rise towards $72.

gilead


Micron

Micron shares got crushed today after Morgan Stanley downgraded the shares, to equal weight. I didn’t have access to the actual note, but the write-up I read makes the call sound wishy-washy and feels like a downgrade because the stock got to the analyst price target, and the analyst doesn’t feel comfortable raising the price target. That is my take away.

Regardless, shares got hammered because that is what high beta stocks do. But the stock did stop falling around $57.50, which is a positive. The chart doesn’t look too damaged, but that doesn’t mean the selling is done either. The chart is not easy to read at this point, with gaps galore.  It would seem there is explicit support at $54, and unfortunately, $61.50 will now act as resistance.

The thing that can happen, two weeks of sideways trading to consolidate.

micron

That is it! Tomorrow we move into June. Time goes so fast, doesn’t it?


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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.

© 2018 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

Tags: #sp500 #biotech #technology #micron #amazon #gilead #alphabet #staples

Stocks Show Their Might Led by Chips and Biotech

Stocks Show Their Might Led by Chips and Biotech – The Daily Rundown



Stocks Show Their Might Led by Chips and Biotech – The Daily Rundown

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We surely didn’t get the breakout I was looking for today, but we sure did get an exciting trading session, that told us about the market’s current state of mind. If this had been February, I think word of tensions with North Korea, or President Trump pulling out of a meeting with the leader of North Korea would have sent the market reeling lower by 1.5 to 2 percent on the S&P 500. But this is May and spirits seem much brighter.


Equities indeed sold-off following the news President Trump was calling off the summit with Kim Jung-Un of North Korea in June. The S&P 500 had an initial knee-jerk reaction taking it down about 1 percent by 11 AM. But the rest of the day was about price recovery, and by the close, the S&P 500 finished down about 20 bps, while the NASDAQ recovered all its losses to finish essentially flat. That is impressive, and I think it tells us a lot about the state of mind for the market. What had been a weak market just a few short weeks ago, seems to have become more confident.

^SPX Chart

^SPX data by YCharts


Risk-on Leadership

Like I wrote yesterday, we saw leadership prevail from the key players, with chips and biotech’s up on the day by nearly 40 bps, the risk-on sectors of the markets. Yes, Utilities rose by 80 bps on the day, but that has more to do with yields falling, with 10-year yields down to 2.98 percent, from 3.10 a week ago.

Chips mounted a rally, from down 80 bps at 11 am, to up 34 bps by the close, a significant recovery. What stocks led, well the usual suspects, Micron up 2.6 percent and now at $61.50, followed by AMD up 2.0 percent, On Semi up 3.6 percent, and Broadcom up 1.3 percent.


Micron

The advance in Micron continues to be impressive, shares are nearing a very big breakout, sitting right at resistance at $61.50. If it can manage to advance tomorrow, then it might still have some further to go, and $61.50 should offer support in the future should it climb and retrace.

Should Micron break out tomorrow and rise above its 52-week high of $63.42, then it may be on a trip towards $73, a price not seen in nearly two decades, back to the year 2000! Yes, a break out for Micron is a huge deal.

The bears will argue the DRAM pricing cannot stay strong, and Micron’s recent revenue and earnings surge cannot last, while the Bulls say the opposite.

Based on estimates to the year 2020, analysts are forecasting flat revenues and declining earnings, the street seems to believe the good times can’t last, which means Micron’s stock can continue to climb should it keep putting up strong results because a positive outcome is not baked into the stock.


Netflix

As noted yesterday, Netflix broke out, and it continued today with shares reaching an intraday high of $353. Some in the media were talking about Netflix now having a market cap just barely higher than Disney’s and Comcast, at $152.14 billion to Disney’s $152.03 billion, and Comcast at $145.78 billion. Most of that has to do with the fact that Comcast is nearly down 20 percent on the year.

DIS Market Cap Chart

DIS Market Cap data by YCharts

Plus, my knee-jerk reaction, why shouldn’t Netflix be worth more, aren’t Comcast and Disney trying to become like Netflix? Isn’t that why Disney is launching a direct to the consumer product. Isn’t that why Comcast is trying to steal Fox’s assets away from Disney? Of course, it is. Comcast and its cable line will be worthless in another few years when Verizon and the other wireless players launch 5G, and cord cutting start to accelerate at an even faster pace.

Imagine a world, where one day like your phone and your tablet, your TV will be able to access data, but not through wifi, but your wireless provider. It sounds crazy, but how hard could it be?

Why else would Comcast be so hot to get Fox? They want to keep building up their content library and become a content business.

-Mike


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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.

© 2018 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

Tags: #netflix #micron #comcast #disney #amd #broadcom #biotech #chips #stocks #sp500

Stock Market Sentiment Is Turning More Bullish – For The Week of May 21



Stock Market Sentiment Is Turning More Bullish – For The Week of May 21

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Michael kramer and the clients of mott capital own shares of Swks

The bull run in stocks was put on hold last week, but the current run is likely not over. In fact, there appears to be a clear separation that has taken place since the start of May. We find that Biotech and Semis are the leaders this month, with each up by over 7.5 percent. Followed by a group of Technology, Energy, the Small Cap Russell 2000, and Materials all up about 5 percent. Meanwhile, the S&P 500, Financials, Health Care, and Discretionary are all up about 1 to 2 percent. Finally, Utilities and Staples are down on the year.

XLK Chart

XLK data by YCharts


What Is The Market Telling Us

It tells us how the market is feeling on a couple of topics. The underperformance of the utilities and the staples is an apparent concern by investors regarding the more interest rate sensitive portions of the equity market. As interest rates rise, dividend yields must increase, and that puts downward pressure on the stock prices in the group. Additionally, it would also suggest a rotation out of the defensive part of the market.

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Risk On Back

Meanwhile, the risk-on parts of the market, Biotech, and Semis are in favor and that would suggest that investors are feeling more comfortable moving back into the riskier more volatile parts of the market. It would indicate to me that if these two sectors continue to perform well, the market will continue to rise.

Even the second tier of leaders, in Technology, Energy, Small caps, and Materials are another layer of risk, and again it too supports the continued rise in the broader S&P 500.


Looking at The Semis

When we look at the semiconductors, AMD has been the best performing stock this month rising by about 20 percent, followed by Qorvo, Micron, Teradyne, and Skyworks.

Teradyne

Teradyne’s significant gains in May are more of a bounce back, because even with the 15 percent rise thus far in May, shares are still down by nearly 25 percent from their peak earlier this year. The poor company guidance led to be a big gap down in the technical chart. It seems like the stock wants to fill that gap back to around $40, but one must worry that once filled, the stock may continue that trend lower.

Qorvo

Qorvo has been a stock stuck in a trading pattern of up and down since the start of 2017. After a significant gain; shares could be heading back the other way.

qrvo

Micron

Micron gave us the big breakout, but to this point, resistance at $54 has proved challenging.  But what I take as a positive is that that stock has been rising on more volume, and the trend, for now, continues to be higher. I still think we reach around $61.50.


Waiting On Qualcomm/NXP

It will be interesting to see given the setup in these stocks if there shall be a rotation into other parts of the semiconductor space. Remember, we are still awaiting word on the Qualcomm/NXP deal from the regulators in China, regarding a potential approval. If that should happen, I think the sector will get an extra jolt, in a sign that that trade tensions has been easing between the US and China.

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Staying Hot

For the most part, we need to continue to see the risk on the part of the market stay hot, and investors continue to move back into these parts of the markets.

Perceptions and Mood

At this point, much of where stock prices go will be driven by sentiment, mood, and perception more than anything else. Fundamentals are solid, with GDP for the second quarter tracking at 4.1 percent, according to GDPNow, through the mid-way point of the quarter. Meanwhile, earnings season for the first quarter of the year were very strong.


 

Strong Fundamentals

According to Dow Jones S&P Indices of the 91 percent of the companies in the S&P 500 to have reported results 77.25 percent beat estimates, while sales grew by about 9.5 percent versus a year ago. The S&P 500 is trading at just 16.7 times 2019 earnings estimates of $163.33 per share.

It is a robust fundamental setup, while the bulls appear to be coming back.

Mike

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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.

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Tags: #stockmarket #may21 #bull #senitment #biotech #technology #semiconductors #chips #stocks 

Semiconductors, Small Caps, and Biotech’s In Focus



Semiconductors, Small Caps, and Biotech’s In Focus

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Semiconductor stocks were the weakest group today, with the SOXX ETF dropping by roughly 1.5 percent. The big loser in the group was Applied Materials (AMAT), dropping by about 7 percent. The company reported slightly lower than expected revenue guidance for next quarter. But let’s face it does it come as a surprise? It shouldn’t at this point. Many of the biggest chipmakers have disappointed, going all the way to the first significant report out of Taiwan Semi back in the middle of April. AMAT noted smartphone sales have been weak, and below expectations. Well, there is a shocker! Haven’t we heard that one before?

Despite the pullback, the group is on fire in the month, rising by nearly 7 percent even after today. So, you can’t complain too much, and the outlook for the group still looks solid on many fronts.


AMD

Can you believe AMD shares are up nearly 40 percent just since the start of April? Wow. That relative strength index is well into overbought levels, with a reading of around 73. But this one could be overdue for a modest pullback back to $12.50ish.

amd


Small Caps

Despite the S&P 500 stalling out, the Russell 2000 continues to reach new record highs, and the breakout continues.

russell 2000


GrubHub

With stocks like GrubHub in the index, it would seem there are more gains likely to be had. The chart on GrubHub looks powerful and ready to breakout.

grub

Proofpoint is another example:

proofpoint

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Biotech

Well, Biotech stocks as measured by the XBI, are up over 5 percent just since May 10, maybe it has something to do with the speech last week on drug prices? I’m not sure about that; I’m looking through some of the big movers, like Loxo Oncology, popping over 30 percent after positive phase 1 data presentation at ASCO.
XBI Chart

XBI data by YCharts

We will see what the next week or so brings, and which stocks continue to perform the best in the group. The leadership in that sector is still not coming for the most part from the big players.

Overall it was a solid week in which to build for the broader market, and I will discuss more in further detail over the weekend

That’s it!

-Mike

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#smallcaps #semiconductors #biotech #proofpoint #grubhub #amd

The Stock Market Is Moving Back To A Risk-On Mentality



The Stock Market Is Moving Back To A Risk-On Mentality

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The risk-on asset classes had good days, with Biotechs (XBI) up 1.4 percent, Chips (SOXX) up 1.3 percent, and materials (XLB) up about 1.2 percent. Risk-on is what one wants to see start to happen more because it tells us that investors are looking to move into more aggressive parts of the market, and that bodes well for a rise higher.

S&P 500

The S&P pieced together a decent day, rising about 40 bps, recovering about 2/3 of yesterday’s decline. It seems the past three days have been a game of back and forth filling the gaps from the previous day. The good news is that today, there was no gap up or down, and that should hopefully mean tomorrow we continue higher.

S&P 500


Sectors

The XBI continues higher and appears to be heading back to the previous highs.

xbi

The setup in Chips also continues to be very strong.

ch

What is ironic is just how much alike the two charts look. I guess the chips and biotechs are part of the same risk-on algo running.

Materials are also breaking out, and that, of course, is a positive as well.

materials


Russell

Not only that, but the Russell 2000 is breaking out as we talked about the other day.

russell 2000


Stocks

Nektar broke out today, after bouncing off our support level around $70.

nektar

Intercept looks close to breakout too.

icpt

Micron broke out and appears to be heading back to $61 now.

micron

Lam Research also appears to be breaking out and could be heading back to around $224.

lrcx

Texas Instruments back to $120.

txn

The suspense in Amazon is just killing me! BREAKOUT ALREADY!

amazon

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Dollar

It looks like the dollar finally broke out, and it seems clear which way it is going.

dollar

Night!

Mike

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Tags: #sp500 #biotech #materials #chips #nektar #amazon #micron #lam #texas 

 

Stocks and Sectors Breaking Out For The Week of May 14

Stocks and Sectors Breaking Out For The Week of May 14



Stocks and Sectors Breaking Out For The Week of May 14

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The week of May 14 will try to continue to build on last week’s strong performance. With earnings pretty much behind us now, investors can continue to digest the strong earnings seasons. Meanwhile, the latest inflation and wage data should also calm nerves over runaway inflation or a Fed that will need to be over aggressively, and allow for stocks to continue to rally this week.

sp500

The S&P 500 broke out last week, and the relative strength index also broke out, and I think we should continue to see the broader market continue to trend higher this week. I’m still looking for a rise to about 2,800 on the S&P 500 over the next couple of weeks.

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Consumer Stocks

We have seen Technology names breakout over the past week, and I think we see the consumer stocks finally breakout this week.

The XLY ETF is very close to breaking out, and the RSI also appears set to breakout, I think that happens this week.

consumers


Amazon

As I have written previously, Amazon is close to breaking out, and I think that breakout can happen this week, as it sits right below resistance.

amazon


Home Depot

Home Depot is another one that already has broken out, and is reporting results on May 15. Analysts are looking for earnings for $2.05, on revenue of $25.2 billion.  A return to $210 may be reach for later this week.

home depot


Disney

Disney is also likely heading higher, potentially back to $111.

disney

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Nvidia

Technology stocks have already broken out, and we are going to want to see a strong continuation this week. Nvidia is going to be the one to watch here. It has broken out, and the earnings results served as a retest of the breakout, and it held. Now we to see a follow-through higher.

nvidia


Micron

Micron also broke out, and I think a rise to about $54 is in the works.

micron


Alphabet

Alphabet is has been on a tear, I think that one continues, on towards $1150.

alphabet


AMD

AMD has also broken out and a rise to $13.70 could be coming shortly.  amd

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Biotech

Another group I will be watching are the biotechs, to see if they can build on Friday’s strength.  The XBI appears to have broken out, and the RSI did as well.  We could see a rise back to the highs around $96.

biotech


Nektar

Nektar shares bounced right off support around $70, the key this week is if the stock can get back over $83.

nktr


Acadia

Acadia may also be close to breaking out and a push back to $27 would sure be nice.

acadia stock

 

Mike

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Biotech's Stock May Have Finally Been Unleashed

Biotech Stocks May Have Finally Been Unleashed

Biotech Stocks May Have Finally Been Unleashed

Michael Kramer and the Clients of Mott Capital Own CELG
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Stocks continued to move higher, led by the Biotech’s, which were up by about 3 percent. There’s something we haven’t said in a long time. The highly anticipated speech regarding drug prices by the President didn’t seem to be as bad as many had feared. Increasing competition, deregulation, cutting out the middlemen, is at the core of the proposals, based on my interpretation.

The drug pricing overhang had plagued this sector since September 2015, when Hillary Clinton made it a political point in the race for President. If this is the worst of it, I think the group might have much further to rise. Companies like Celgene, Gilead, Biogen, and Amgen are all trading at some of their lowest earnings multiples in years. Albeit for good reasons in some cases, but some of the valuations seem excessively low.

The details aren’t fully known yet, and what ends up getting put into law may be very different. But just knowing the blueprint for how they plan to tackle drug pricing might unleash the sector from the shackles of the past three years.

I think the group is likely heading higher.
biotech


S&P 500

The S&P 500 continues to rally, and finished near the highs at 2727, up about 2.5 percent. The setup continues to look strong.

sp500

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Amazon

Technology stocks continue to look strong as well and so do consumer stocks, even though Amazon still didn’t break out.  $1620 is proving, for now, to be tough for Amazon. Now that I’m calling for it to rise, it will probably go down! Ugh. We shall see.

amazon

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Nvidia

I’m surprised Nvidia was down today. But I also do not think today’s price actions mean the stock is going lower. Shares held firmly above support around $253. The results were stunning, and this probably keeps working higher.

nvda


Amgen

Amgen shares continue to look strong as well, with a well-defined double bottom, and what looks like a solid path towards $178 to $180 range.

amgen

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Gilead

Gilead also looks as if it could see a rise to about $72.

gilead


Biogen

Biogen also looks like it is on the cusp of a big breakout.

biogen

That is going to be it for today.

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Tags: #biotech #amgen #gilead #biogen #technology #amazon #sp500

the stock market for the week of april 16

A Look At The Stock Market For The Week Of April 16 – Calm Is Returning


A Look At The Stock Market For The Week Of April 16 – Calm Is Returning

It is anyone’s guess just where the stock market goes this week; now with the addition of geopolitical risk from the airstrike over the weekend in Syria, it is one more thing investors can fret over. The S&P 500 finished the week around 2,656, and the stock market has virtually gone nowhere since the end of February.

S&P 500

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Volatility Measures

The S&P 500 put to call ratio is at 1.49, which means there are currently more open puts than calls, and that ratio is in the middle of the range and surely doesn’t seem alarming.

SPX Put/Call Ratio Chart

SPX Put/Call Ratio data by YCharts

The VIX index is below 18, and all of the indicators continue to indicate the fear level is continuing drop. We can see when exploring the options market for the $SPY, that the term structure for implied volatility is normal, and fell on Friday as well.

impllied volatitlit

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A Rise To 2,691

So if the events from the weekend are viewed as a one-off, which I think it will, then it should have no impact on trading. With fear levels continuing to fall, it would suggest that stock market will continue to stabilize around current levels and begin to work higher back towards 2,691.


Technology

Technology stocks will continue to be the focus this week, and with earnings for many of the big companies coming next week, we will want to watch how these companies are performing in the days leading up to these results.

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Microsoft

Microsoft continues to look weak and has a relative strength index (RSI) that continues to trend lower, despite a stock price that is still trending higher, and that is bearish divergence signal to me. In fact, volume levels haven’t been that strong either, a sign that perhaps interest in the name has been declining.

microsoft

While shares are nearly 4 percent off their 2018 highs, they are still up 8 percent on the year. Shares are trading at their highest one-year forward price to earnings multiple in years, and that one-year forward multiple comes to nearly 24 times 2019 earnings estimates of $3.95 per share. For that multiple you get earnings growth of only 8.55 percent in 2019,  if it seems like the stock is expesnive, you are not alone, I feel the same way.

MSFT Chart

MSFT data by YCharts


Cisco

Cisco doesn’t seem different Microsoft, with a  technical chart that looks relatively bearish. Cisco comes at a fair better valuation, and believe it or not, on better earnings growth. Cisco is expected to grow earnings in 2019 by nearly 11 percent to $2.87, while only trading at 15 times those estimates.

cisco

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Biotech

The XBI Biotech ETF has to this point avoided a massive double top formation, not breaking the neckline, and is managing to stage a relatively strong rebound. The next real test comes at $93.60, and we will need to watch closing for that to happen.xbi

If the group is to continue to rise it is going to need to come from the Agios, Spark, and Sarepta’s, three of the top performing stocks in the XBI, because it surely isn’t coming from Biogen and Amgen or the likes.

Agios

I had written in an Investopedia article, that Agios looked primed to fall to around $72, and sure enough, it did and then rebounded sharply off of support. It sure does have a strong uptrend in place, but the RSI continues to trend lower, and that makes this one’s further rise questionable.

agio

More tomorrow.

That is going to be it. Good Luck this week.

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Tags: #stockmarket #sp500 #microsoft #cisco #biotech $agios

stock market biotech

Stocks Rip Higher, Plus A Look At The Baker Brothers Top 5 Holdings


Stocks Rip Higher, Plus A Look At The Baker Brothers Top 5 Holdings

This stock market is getting frustrating. Yeah, I know the S&P 500 was up by 1.6 percent on the day, but the problem is that it closed at 2,656. In the midday commentary, I noted I was looking for a close above 2,660. I know it is only 4 points too but look at the trend line in the chart below.

S&P 500

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Technology

But here is the good news, the technology ETF, XLK broke above $66, and closed above $66. That is a victory! We can see that the XLK broke out on Apri 4, then retested the downtrend on April 6, and we have been higher since. If the breakout is for real, the the XLK could be on its way back to over $67. In fact, should the bulls juice get flowing, then a rise to $70 could be a genuine possibility.

techology

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Facebook

The majority of the XLK breakout should be to Facebook, finally rising above $161.5, after multiple failed its attempts. I’m guessing the market liked the testimony Mark Zuckerberg had to offer Congress. $166 will be a big test of how strong resistance is there.

facebook

JP Morgan

But not was all fabulous, because JP Morgan is still around $112.50, unable to break out, and earnings coming on Friday morning.

jpm


Amazon

Amazon tried to get above $1440 and is still cannot.

amazon


Biotech

Even biotechs had a healthy day, with the IBB rising by nearly 3 percent. It also broke out of that terrible downtrend it had been in since mid-March. That looks like a sextuple bottom in the IBB. Is there even such a thing? To my knowledge no, but there it is.

ibb

Biogen shares still look lousy.

biogen

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Baker Brothers

Even the Baker Brother’s top holdings are starting to go back up, barely. Their top holdings have performed lousy for some time as if some more prominent investors are betting against them, trying to keeping these stock down. Is that even possible? Look though. \

Alexion

Look at Alexion despite, the positive trial results, and a bunch of analysts upgrades this thing still can going. The average analyst price target on Ycharts is $158, 40 percent upside! What gives?

alexion


Incyte

Even Incyte bounced a bit today; it has been smoked since the negative trial results. This stock was once $150, over a year ago. Remember this was thought to be a buyout candidate back then.

incyte

Well BioMarin, not much to say here, but then again it has been that way for 2 years!

bmrn


S-GEN

The Seattle Genetics chart is not looking so hot, let’s say it is a tipping point and looks bearish.

sgen


Acadia

Finally Acadia, maybe, just maybe, the stock has puked out all the garbage and negativity, maybe. Thanks, CNN you did more damage than any sell-side analyst could have done.  Forget about filling gaps, let’s just get the stock stabilized, and hope the article didn’t destroy future sales. acadia

That’s it

Mike

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8 Stocks and 3 Sectors To Watch For The Week Of April 2!


8 Stocks and 3 Sectors To Watch For The Week Of April 2!

The first quarter ended on a positive note, with the S&P 500 finishing Thursday higher by about 1.4 percent. It appears for now that a double bottom has been put into place on the index when looking at the intraday charts, and we are going to want to see the momentum carry through on Monday morning.

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spx

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Sectors To Watch:

Technology

The technology ETF ($XLK) managed to finish just below its uptrend line, which again is disappointing, but still, the overall longer-term trend continues to be higher. We need to watch for the XLK to continue to hold the longer-term uptrend, currently around $64. That is the most important level to watch.

technology


Biotech

Biotech continues along its upward trend as well, that has been in place since last year. Additionally, a symmetrical triangle appears to be forming, and that could be a sign the group is gearing up for a break out at some point in the second-quarter, and perhaps a strong second-half of 2018.

biotech


Semis

The semiconductors continue to look strong as well and are entrenched in an upward direction as well.

semiconductors

Stocks To Watch:

Facebook

Facebook is still the stock to watch in this market, and for now, the trend in Facebook is higher, and like the broader S&P 5oo, it appears a double pattern is in place, and that is good. A big test comes at $166, that is the next resistance level.

Facebook


Google

Google managed to clear two downtrends on Thursday, and that is a positive. $1078 is the next level to watch.

google

Amazon

Amazon has a big gap to fill back at $1,500, so look for a rise. But should Amazon fail at $1,500, I think it moves lower, towards $1250.

amazon

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Netflix

Netflix closed right at resistance around $295. Which way does it go? I think it goes higher, especially as the earnings preview notes start coming out.

netflix

AMD

AMD found a nice bounce off of support at $9.80, a bounce to $10.70 is the next level to watch.

amd


Micron

Micron also managed to turn higher around support at $52.25, and an increase to $55.60 is the next level to watch over the short-term.

mu

Twitter

Twitter filled the giant gap last week, and that means you should watch for the stock to start working higher, the next big test comes at $36.75

twitter

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Tesla

It doesn’t get any bigger than Tesla this week, with first quarter delivery numbers, and of course the Model 3 ramp update. The Bloomberg Model 3 shows Tesla trending towards producing about 2,200 cars per week. While the company also registered about 2,050 VIN’s in a seven day period through March 30. My gut says the press release reads something like, “In the final few days of the quarter, Tesla was producing cars at a rate that would equal 2,500 Model 3’s per week”.

The stock found a very big bounce off of it long-term support around $245, and that means the next test comes around $290. Watch for a bounce this week, if those Model 3 numbers come around 2,500. We should know our answer no later than after the close of trading on April 3.

tesla

Good Luck!

-Mike

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© 2018 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

Tags: #sp500 #tech #technology #semiconductors #biotech #micron #tesla #amazon #facebook #google #amd #netflix #twitter

stock market amazon facebook twitter roku breakouts

The Stock Market Breaks Out, Is The Bottom Now In Place?


The Stock Market Breaks Out, Is The Bottom Now In Place?

We made it, the week, the month, and the quarter are all concluding together, and it couldn’t have come at a better time. The stock market is in rally mode, with the S&P 500 up about 1.7 percent as of 2:45, and the NASDAQ up about 2.1 percent. A strong rally and signs suggest stocks should continue to work higher.

Unlike Monday’s sharp rally, this rally comes after a close retest of the lows from March 23, around 2,600. Additionally, the S&P 500 was able to break free of resistance around 2,633, with a rise of above 2,647 giving me the sense we could make a move towards 2,691 come early next week.

S&P 500

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Vix

Look at the VIX fail at resistance.

vix

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Facebook

As I noted yesterday, signs were emerging that Facebook was bottoming, and today’s sharp rally confirms that bottom for now. In fact, shares have risen to $160, and the next stop will likely come around $166.


Alphabet

Google shares are also rising sharply today, after bottoming yesterday as well. The positive setup comes as the stock breaks the nearly two-week long downtrend. I think a rise towards $1080 is in the works.

google

Netflix

Netflix held above $273, and again crossed over $287, I’m looking for a rise of over $305 for now.

netflix

Amazon

Amazon is back above $1440, and a move back to $1500 seems possible over the short-term, but I think longer-term the stock still has plenty of downside risk.

amazon


Micron

Micron is struggling to get back over $52.25, But I think it does. The gap has been refilled, and the lower volume levels suggest to me that the selling pressure is waning. I think it has a chance to get to $56.

micron

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Biotech

Even biotechs are breaking out, look at the IBB rising above $107, we could be heading back to $111.50. That is a beautiful “W” in the chart

biotech

Biogen

Biogen is rallying, but I wouldn’t touch this thing unless it gets over $282.

biogen


Celgene

Is Celgene finally breaking out? Oh, do I hope so. I have been wrong time and time again with this.

 

celgene

Roku

I don’t think Roku is done falling. But borrow rate is down to 64 percent.

roku

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Twitter

Twitter managed to come all the way back to $27.25 and is now beginning to work higher. Look at that huge gap that just got filled.  It looks to be a nice setup.

twitter

Till Tomorrow.

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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.

© 2018 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

Tags: #sp500 #tech #technology #amazon #vix #facebook #apple #google #biotech #futures #yen #euro #dollar #nvidia #mu #netflix #twitter #roku

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It Is Now Crystal Clear Why The Stock Market Is Falling


It Is Now Crystal Clear Why The Stock Market Is Falling

It has been another wild day on Wallstreet, and it is now crystal clear what is going on. This isn’t about trade wars, it isn’t about the Fed, it is a technology-led sell-off of companies that appear to carry stretched valuations. But suddenly signs of separation began to emerge, along with signs of a bottoming for the broader market are being put into place.

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Facebook

We can start with the lead culprit, Facebook, which was up today. We can see that Facebook broke its intraday downtrend the other day and then retested all day yesterday. The fact that the downtrend broke, and support around $148-149 has held gives me hope the stock can begin to rebound. The first stop should it rebound is around $166. facebook

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Google

We can see a similar type of pattern in shares of Alphabet, which also managed to finish flat, but hold the $1000 level.

We can see in the chart, the same downtrend was broken, and a retest of that downtrend.

googl

The Technology ETF, XLK, didn’t break a downtrend, but it has continued to hold support and its long-term uptrend.

technology

Nvidia

Nvidia shares are also holding support above $218.

nvidia


Micron

Micron is trying to hold the base of the gap at $52.25. It needs to hold, or we are looking at $49.

micron


Netflix

I have been saying I thought Netflix would go to $295, and it did, and then it went straight to the next level at $287 and held.

nflx

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Tesla

Tesla shares have been crushed, falling to $257! Once the stock broke $290, that was it. You can see it tested $290,  tried to get above $303, and failed, and went straight down from their. Meanwhile, the Bloomberg Model 3 Tracker is now trending at 2,000 cars per week. The bears are cheering victory, because they have been right for two days, after being wrong for nearly four years.

tesla

I’m going to try to be as dipolamatic with this as I can be. I have many times shown how Tesla Model S&X demand has been far better than the competition. To this point I see no evidence to suggest the demand has fallen. The delivery reports quarterly, the blogs I read, or the check of the local Tesla dealer. In fact, at least where I live, I still see more Tesla’s on the road, and based on my observations, they have been replacing the other higher end cars.

In term’s of Tesla liquidity, I always knew there was a risk at some point in 2018; Tesla might need to raise capital again. But concerning Tesla going bankrupt in “months” seems far-fetched in my opinion. As my old boss used to say to me: “All you need to do is a push a button, the capital markets are open for business.” And the markets are open for business, and Tesla can access that capital market any time they need.  There plenty of underwriter that would likely love to be lead left on the cover too.  Could Tesla come to market tomorrow and do a $3 billion equity deal, probably. That is why Tesla is a called a “growth” company, they invest heavily in capex and R&D.

Could I be dead wrong, and Tesla just disappears off the face of the earth. I sure can be, but that why investing carries risk, and for that risk, you get paid a return. Based on the trends and growth, and demand, it is a risk at this point I am still willing to take.

 

-Mike

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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.

© 2018 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

Tags: #sp500 #tech #technology #amazon #vix #facebook #apple #google #biotech #futures #yen #euro #dollar #nvidia #mu #netflix

 

 

The stock market is going down because it is going down

The Stock Market Is Going Down Because It’s Going Down


The Stock Market Is Going Down Because It’s Going Down

I’m struggling to get a handle on what is happening, and the stock market feels more like a casino than anything else. The losses across the market evaporated the gains from yesterday, as technology stocks continue to get hammered. Did the trade war start back up? No.

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Go Take A Walk

When I was walking my dog tonight, the thought came to me, find out when the sell-off started and see what happened on those early days. The beautiful thing about writing this blog, and the member videos, is that it also serves as my notes of things I’m watching. So I came back home, and I looked, the latest wave of selling in the S&P 500 started around March 13 and 14. That was when I started noting about all the stupid upgrades in stocks like Amazon, Micron, and Nvidia, from Amazon conquering the world to Nvidia getting upgrades based on an upcoming movie, and Micron getting upgrades just because it broke the analyst’s previous price targets.  Even MarketWatch.com picked up on my observation.

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Air Coming Out?

Perhaps the sell-off is nothing more the air coming out of some these overhyped tech stocks, like Amazon, Micon, Nvidia, etc. Perhaps it is has nothing to do with trade wars or even my stupid theory about the Fed. Maybe it is selling off is because once again too much momentum was built into some of these technology stock and now the air is coming out.

Would you believe that Nvidia even after today’s brutal sell-off is still up since February 8, by 3 percent! While Amazon is up by nearly 11 percent. Microsoft is up 5.5 percent. Microsoft got a lame upgrade yesterday, actually.

NVDA Chart

NVDA data by YCharts

Amazon is still up 28 percent on the year, while Nvidia is still up 16 percent on the Year! Even Microsoft is up almost 5 percent.

NVDA Chart

NVDA data by YCharts

The Nasdaq 100 is up 2 percent on the year!  Geez the S&P 500 is only down 2 percent.

^NDX Chart

^NDX data by YCharts

Micron is up 27 percent on the year! Geez, even Macy’s is up 11 percent on the year. I only know that because I type an M instead of MU in the ticker field.

M Chart

M data by YCharts

 


VIX

Did the VIX break? I keep looking at it but it ain’t going anywhere. How is it only 22.50, what? How can that be, the NASDAQ was down 3 percent, but the VIX hardly moved.

Blame Facebook

The Facebook news stoked the fire and put the sell-off into overdrive.

Nvidia

Today Nvidia reignited the fears after the company said it was suspending the testing of the autonomous vehicle platform. The news broke around 12:15 and then carnage followed. The problem, the negative feedback loop. Nvidia makes up 8 percent of SOXX ETF, so Nvidia goes down, then SOXX ETF goes down, then Soxx ETF starts selling the positions in the portfolio, that puts pressure on the other ETF’s with stocks such as Intel, Broadcom, and so on. This is the one drawback of all the ETFs.

You can see the sell-off rather clearly and when it started, spreading like wildfire.

NVDA Price Chart

NVDA Price data by YCharts

Was it an overreaction, probably. Nvidia gets the majority of revenue from gaming. But the market has high hopes and expectations for data center, while the automotive end of there business has been slow growing. Of the $2.9 billion in revenue they did last quarter, $1.739 billion came from Gaming, $606 million from the data center, and $132 million from automotive.

The stock stopped right at support around $218 and found a bounce, that is the good news.

nvidia


Facebook

Facebook was down hard again today as well, 5 percent. Is Facebook putting in a double bottom? Well, let’s hope so.

facebook

Because the next level is around $138.

facebook

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Micron

Micron shares have now retraced all the way to $52, and have filled a gap. Now that the gap is filled will the bleeding stop? Let’s hope or the stock is going to $49.

mu

S&P 500

The S&P500 manage to at least stay even with the lows from Friday.

spx

I have nothing else to say for today. I need to take a break.  I suggest you do the same.

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Tesla

One comment on Tesla, I do not know how Model 3 production will be or what the burn rate is.  I read the blogs tracking the vins, the Bloomberg model 3 tracker, and I drive through the parking lots of Tesla stores looking for the elusive model 3, making into a game to keep my kids entertained. But if you are betting on Tesla going out of business, then you must also bet that it can’t raise funding through an equity offering. Or that someone like Tencent, who already owns a 5 percent stake, would not just buy them out.

-Mike

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Where Does The Stock Market Go From Here

The Bank Stocks Are Sending A Clear Message About The Stock Market

Why Micron Is A Risky Play

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Looking At Twitter

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Square’s Soaring Stock Is Due for a Correction

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Why AMD Options Traders Are Bearish Long Term

Improving Earnings Will Push Stock Prices Higher

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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.

© 2018 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

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libor stock market

The 4 Keys To The Stock Market For The Week Of March 26


The 4 Keys To The Stock Market For The Week Of March 26


It will undoubtedly be an interesting week, especially with the quarter end on Thursday, remember the markets are closed on Friday for Good Friday. The Eurekahedge 50, an index that measures the top 50 hedge funds, was up only 1.15 percent for the year at the end of February, and that was trailing the S&P 500 total return index of 1.83 percent. The Eurekahege 50 had a gain of only 6.96 percent in 2017, severely underperforming the S&P 500 total return gain of 21.83 percent. The last things these guys want to show is a big loss for the first quarter. So profit-taking could weigh heavily on some of the more significant gainers this final week, think Amazon, Netflix, Micron, and so on.

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Libor

I do not know the exact reason why the market is selling-off, nobody does for sure. But I have laid out the reason I think it is going down in a couple of articles this weekend. I have read in some different place that rising Libor is another source of concern, and yes it has increased a lot in recent weeks, and as of March 23 it stands at 2.29 percent. But the truth is that libor has been rising aggressively since the summer of 2015.

libor

I think the increasing spread between Libor and the Effective Funds Rate and the 3-Month Treasury, is nothing more than the Libor anticipating future rate hikes. In fact, that spread between Libor and Federal Funds Rate, already declined from 0.74 percent on March 15, to 0.61 percent currently, all since the Fed raised the effective funds rate.  Libor sure isn’t going to go down in a rising interest rate environment.

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Earnings

The outlook for earnings continues to be strong, S&P Dow Jones is forecasting earnings for 2018 to climb by 31 percent, and with the S&P at 2,588 as of March 23, it is trading at 17.97 times 2018 estimates of $144.01, and 16.5 times 2019 views of $156.23. I would not call that expensive. In fact, Tech, Consumer, and Healthcare are pretty cheap based on forward earnings estimates.

Fundamentally speaking the market doesn’t look expensive. But with that said, emotions, Algos, and ETF’s do not care about the fundamentals.

Sunday Night

So what will I be watching this week? Well, it starts Sunday at 6 PM EDT, first looking at the currency market and seeing which direction the dollar trades, most notably versus the yen and euro. Remember Japan is an export economy, so a strong yen is bad for Japan’s economy and the stock market, and that means Japan could be down big on Sunday night into Monday. The next thing we want to watch is how Europe trades, followed by the S&P 500 future, and more critical than price, will be the volume in the S&P Futures.

Notice the S&P 500 Future bottomed at 2,531 twice and it happened in the middle of the night, on huge volume! So I want to see if these big buyers come back.

S&P 500 futures

That is all before the market even opens at 9:30 am Monday.


Monday During The Day

During the day Monday, I want to see the VIX spike higher, over 30,  and massive levels of volume in the stock market. And as crazy as this sounds, a 1.5 –  2 percent decline in the morning, followed by a turn in the early afternoon with a strong finish into the close pushing the index to the positive, and ending near the highs of the day.  If this doesn’t happen Monday, then it likely means this is going to drag on for a few more days.

Also, you need to watch the market leaders the most closely during times like this, such as Apple, Amazon, Netflix, Alphabet, Microsoft. But the Banks will be another big group to watch, as well as Biotech. Biotech is the most aggressive part of the stock market in my opinion, and if risk comes back –  it happens in biotech first.

Is it a perfect system? No. But it comes with 25 years of experience at this game, and over the years, I have pieced this all together.

Hope it helps you start off the week.  Good luck.

-Mike

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Recent Videos:

The Bank Stocks Are Sending A Clear Message About The Stock Market

Why Micron Is A Risky Play

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Why Facebook Has Further To Fall

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Michael Kramer and the clients of Mott Capital Own shares of NFLX GOOGL

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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.

© 2018 Mott Capital Management, LLC.  Use, publication or reproduction in any media prohibited without the permission of the copyright holder.

Tags: #sp500 #tech #technology #amazon #vix #facebook #apple #google #biotech #futures #yen #euro #dollar #nvidia #mu #netflix