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Amazon, Microsoft, Alphabet, Netflix Heading Highers, as Banks Plunge - The Week of June 18

Amazon, Microsoft, Alphabet, Netflix Heading Higher, as Banks Plunge – The Week of June 18



Amazon, Microsoft, Alphabet, Netflix Heading Higher, as Banks Plunge – The Week of June 18

MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF NFLX and googl
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The Week of June 18

The stock market rally will likely continue the week of June 18. The setup in the charts is still overly bullish for the S&P 500, as the relative strength index (RSI) continue to trend higher. My feeling is this week the S&P 500 rises above 2,800 and starts its move on towards 3,000 over the balance of the year. As we have talked about on many occasions earnings growth in 2018 is strong, and to this point, we haven’t seen those earning estimates adjust lower, and that is a good thing.

GDPNow is tracking the second quarter at 4.8 percent, with the next update coming on the 19th.  Additionally, a stronger dollar will help to weaken the Euro and give Europe a much-needed economic boost. But that also means that the price of oil will likely continue to its decline. I suspect we will see that continue this week as well.

spx

Technology

Technology stocks have stalled out over the past few trading sessions, but I suspect they will get into gear this week.

technoloy

Alphabet

Shares of Alphabet are nearing a really big breakout level at 1,172.

google

Microsoft

While Microsoft appears to be looking for a bounce back to the top its trading channel as well.

microsoft

Speaking of Microsoft I saw some really big bullish bets in the stock this week, in the January 2020 $135 calls. It is an aggressive round of buying in these calls considering the length of time till expiration, and considering the strike price is over 30 percent higher than the stocks current price.

Facebook

Facebook stock just continues to work higher along its uptrend, which started at the stocks low in March in April.

Amazon

Amazon’s stock continues to push higher, and I still think this works its way towards $1840.

amazon

Netflix

This is going to sound nuts when I say this, but I thought it was nuts when I said Netflix would rise to about $390 just a few short weeks ago. But the stock could be somewhere around $450 after earnings results. Based on those trends we have been tracking on Google Trends for subscriptions, it doesn’t seem impossible.  We know international growth has been on fire.  I suspect over the next week or so some sell-side analysts will likely start putting out some data which suggest Netflix may beat subscriber estimates, and that may lead to more upgrades like we saw out of Goldman this week.  It could be a case of being too optimistic on my part, but we have seen this same trend over the last few reporting periods.

netflix


Banks

It will be a big week for the banks, with Goldman and Morgan already falling below key support levels, and JP Morgan, Bank of America and Citigroup all sitting on support.

I’m just going to show the chart for BofA because they all look nearly the same.  I think many people look at the chart of these stocks and miss read them. They see the downtrend, and the uptrend, and assume that the banks are going to breakout to the upside. But instead you should be looking at the downtrend and the support level which runs flat at $29.20 on the chart.

We can see that each time the stock has hit that support level since the middle of March it has held, and never retested the long-term uptrend. It would suggest to me the support at $29.20 is the level we need to pay the closest attention to, and that is the pattern the chart is following, which is a falling triangle, and that is bearish. I think that means the banks and Bank of America are all heading lower.

 

bank of america

The 1o-2y treasury spread also hit fresh lows around 35 bps.

spread

Dollar and Oil

Also keep an eye on the dollar index, for a breakout above 95, and oil for breakdown towards $61.

dollar

oil

Good Luck this week

-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. 

#amazon #microsoft #netflix #alpahbet #banks #jpmorgan #citigroup #bofa #dollar #oil #stocks #week #june18

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10 Indicators To Watch In The Stock Market For The Week of May 28 stock to watch

10 Indicators To Watch In The Stock Market For The Week of May 28



10 Indicators To Watch In The Stock Market For The Week of May 28

MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF NFLX & AAPL
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The coming week will be a big week when it comes to data, with inflation and jobs data starting on Wednesday. First, we get ADP private jobs data, with consensus looking for 186,000 jobs created in May, and then 1Q GDP comes later that morning with consensus calling for growth of 2.3 percent. Thursday is personal income and outlays, PCE y/y is expected at 2 percent, while PCE Core ex-food and energy is projected at 1.8 percent. Friday is the employment report, with estimates calling for 185,000 jobs created, and average hourly earnings up 2.7 percent y/y.  You can find more at the Bloomberg calendar, a handy tool.

So, we should expect the week to have a little more volatility following the numbers, each day, but this week will most certainly be all about inflation. When you look at core PCE over the course of the last 10-years, we can see that it has been consistently low.

PCE like the other gauges of inflation, like PPI and CPI, tracks extremely closely to the price of Oil. 

By the way in case you are curious you can see the similarity with oil and PCE ex-food and energy, are not as close.

When it comes to the future of inflation and interest rates, we will need to watch the price of oil. Wages should continue to remain contained as well below 3 percent.

So is it possible that we see some huge spike in inflation worries this week, well anything is possible. Is it likely? I have a decade worth of data saying no. Additionally, one must remember that the data is backward looking, and oil is a real-time barometer of inflation, and so if oil continues to fall come Tuesday, then I suspect rates fall with it, regardless of the reports.


Stocks To Watch

The most important stocks to watch this week, Netflix, Amazon, Apple, Micron, Biogen, Microsoft, P&G, and Coke. Yes P&G and Coke! Really. Remember if rates are falling then the staples, which have been crushed, should see a rotation back into the names. The other stocks are leads in the most important risk-on sectors around, Technology, Chips, and Biotech.

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P&G

The chart of P&G is bullish and suggests shares could rise back to $78.20 in the short-term. The relative strength index (RSI) is trending higher and has bottomed out at oversold levels now on two occasions.

PG

Coke

The setup in Coke is quite positive too and looks to be heading back towards to $44.50

coke


Microsoft

Microsoft broke out, and we want to continue to see the stock rise. The relative strength index continues to trend higher as well.

microsoft

Biogen

Biogen has broken out as well, and it could be looking to rise back towards $300.

biogen

Apple

Apple has been consolidating since its post-earnings rally, and a breakout higher from the markets most valuable company, would add to positive sentiment.

apple


Micron

Micron is facing a potentially big breakout. Micron has been one of the hottest stocks around, so we want to see this one continue to stay hot, as it acts as a barometer for the risk appetite of the market.

micron

Amazon

Amazon is knocking on the door of a big breakout too.

amazon

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Netflix

There is no doubting that Netflix is the undisputed champion in the market this year, and there is no stock that is more important. If Netflix continues to rise, then I suspect the rest of the market will soon follow.

netflix

Enjoy the long weekend.

-Mike


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Tags: #sp500 #inflation #oil #yield #microsoft #apple #netflix #amazon #biogen #micron

8 Stocks To Watch For The Week of May 21 - Mott Capital

8 Stocks To Watch For The Week of May 21 – Mott Capital



8 Stocks To Watch For The Week of May 21

michael kramer and the clients of mott capital own shares of Aapl, googl, and Netflix
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I have been writing the past few days about the moves in semis, biotech, and the small caps, but I thought today we could focus on the large caps, because eventually for the S&P 500 to continue its rise, the large caps are going to have to get involved.


Apple

It would seem relatively easy to say that Apple has been hands down the best performer in May rising by nearly 13 percent, followed by Facebook, up half as much, increasing by about 6.5 percent. Alphabet is up about 5 percent, while Netflix and Intel are both up about 3.5 percent.

AAPL Chart

AAPL data by YCharts

How much higher can Apple rise, hard to say based on the charts. I never like to try to predict how high a stock can rise when it has broken to new highs; it becomes a guessing game for the most part.

aapl

But it is among the cheapest of the large-cap stocks based on a one-year forward PE earnings multiple around 14.1, while the group has an average of a one-year forward pe ratio of roughly 18.5, with a median of 16.5.

AAPL PE Ratio (Forward 1y) Chart

AAPL PE Ratio (Forward 1y) data by YCharts

Shares are also trading at the upper end of its historical earnings multiple range, so it would suggest there is likely further room for Apple stock to rise. However, that rise may be limited from here over the next quarter until we start getting details on the upcoming iPhone launch or better visibility into next year’s estimates.

Fundamental Chart Chart

Fundamental Chart data by YCharts


Amazon

Amazon’s stock has been stuck right below its previous highs and has thus far been denied what could be a massive breakout. I thought it would have happened this past week, but the market had its thoughts on the matter. But it is quite clear that the RSI is still trending lower, and the volume has been tailing off in the recent days.  So, does the declining volume mean the sellers are waning, or the buyers? Tough to tell with no clear stock price direction in place. If the stock doesn’t break out this week, then I’m beginning to think we retrace to around pre-earning levels of $1500, and it is clear the buyers are the ones that are fading.

amazon

Analysts have gotten more bullish on Amazon as well, upping their earnings estimates for the year by a stunning 48.3 percent to $12.83 per share over the past month. But everyone knows when it comes to EPS, those numbers are BS because Amazon does what it wants when it comes to profitability. Revenue estimates have only climbed by 1.57 percent to an amazing $237.26 billion, a growth rate, of get this, 33.4 percent! That is absolutely a fantastic amount of growth given the size of the revenue base.

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Alphabet

Alphabet has a rising RSI, and that is a positive sign momentum is still building in the stock. In fact, even Friday’s price action is a positive for the future direction. Volume has also remained relatively consistent. I still see this one rising to $1175. Plus, analysts have upped their earnings and revenue estimates for the balance of the year, by 4.5 percent and 1 percent respectively. So again, it suggests positive investor and analyst’s momentum.

GOOGL EPS Estimates for Current Fiscal Year Chart

GOOGL EPS Estimates for Current Fiscal Year data by YCharts


Intel

Intel continues to grind higher, and momentum appears to be higher as well.

intel

Analysts have upped their eps estimates by about 7.6 percent to $3.85 per share while raising revenue estimates by 3.9 percent to $67.6 billion.  The setup and the momentum continue to be strong.


JP Morgan

It had looked like JP Morgan shares broke out, and while it may merely be the way I drew out the trendline, but it appears the breakout is in jeopardy.  Volume levels have been steadily dropping, but the RSI is trending higher, and if the stock can find a bounce early in the week than perhaps momentum can continue higher.

jp morgan

Boeing

Boeing shares appear to have broken out and can increase back to $370 could be in order.

boeing

Microsoft

Microsoft has broken out as well and appears headed higher.

microsoft

Netflix

Finally, Netflix looks like it may be getting to breakout.

netflix

Good Luck this week

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 #largecap #apple #microsoft #alphabet #microsoft #boeing #jpmorgan #netflix #amazon 

 

Stocks Are Getting Ready For A Big Breakout, Plus A Look At Apple

Stocks Are Getting Ready For A Big Breakout, Plus A Look At Apple

Stocks Are Getting Ready For A Big Breakout, Plus A Look At Apple

Michael Kramer and the Clients of Mott Capital own shares of AAPL, NFLX

Another positive day on Wall Street with the S&P 500 climbing by nearly 1.3 percent closing at 2,663. I still happen to think the setup in the S&P 500 is positive, and rise to 2,800 is at work. I spoke about it the other day, and I continue to think that is very much case. The more I look through companies earnings and trends; the more positives keep emerging, over the negatives.   

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Technology

When looking at sectors the same positives trends keep showing up for the most part. In fact, it would appear the technology sector broke out today, and that is a very positive sign. In fact, a rise back towards $69 is maybe on the way.  The relative strength index broke out today as well.

xlk

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A Rise Back To 2,800 On The S&P 500

Biotech

Biotech stocks have been stubborn and have been able to hold support at $100 nice. I think it sets the group for a rise of about 10 percent back to $110.

biotech

Consumer

We can see a similar pattern forming in the consumer discretionary stocks as well.

xly

The same with the chip sector.

soxx


Microsoft

Microsoft has a rising-triangle formation in, and that suggest may about to rise.

microsoft


Netflix

Netflix appears headed towards $340.

netflix


Not All Equal

But that doesn’t mean all stock is about to rise because Facebook, Amazon, and Broadcom have struggled to move higher, and I think it may continue to stay that way. Well, see though. I just find it interesting that Amazon and Facebook reported monster results, and the market hasn’t rewarded them in a big way.

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Apple

I teased this idea on the blog the other night about Apple and a Netflix like valuation. No, I do think Apple will trade at a 60 earnings multiple, but I think in time as investor begin to realize services are becoming a more significant part of the revenue, the market will give the company a higher earnings multiple, as the stock moves away from being primarily an iPhone business.

More and more of our lives are moving to mobile devices, and I think Apple will now start to provide even more services on top of the hardware to make substantial growth the future. Well see, but I like the idea enough, that I bought it today.

That is it for a Friday.

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: #apple #netflix #amazon #technology #bitoech #microsoft #sp500

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Who Was It That Said Earnings Wouldn’t Save The Stock Market?

Who Was It That Said Earnings Wouldn’t Save The Stock Market?

Michael Kramer and the Clines of Mott Capital own shares of GOOGL,V,MA

Well, if there were any questions that a strong earnings season was not going to help lift stock, I think today’s price action officially blew that theory out of the water. Add on Amazon’s colossal beat, along with Intel and Microsoft, and tomorrow is likely shaping up to be another intense day.

One needs to remember companies like Amazon, Facebook, Microsoft, and Alphabet aren’t any companies,  these are among the most significant companies by market cap, within the top 5 of the S&P 500. When they go up big or down, they take the whole market with them.


Amazon

Amazon just blew away numbers, and crushed it on the bottom line, reporting earnings per share of $3.27 per share versus estimates of $1.25. It seems impressive just how much control Amazon has over its bottom line, it comes down to if they want to make a profit or not, not if they can make a profit, and that is something quite frankly, I have never seen before.

Revenues also beat in a big way coming in at $51 billion, vs. estimates of $49.94 billion. But more importantly, the company is guiding revenue estimates next quarter to $51 to $54 billion, primarily inline with estimates of $52.24 billion.

I know the stock is up big after, and between its monster 4 percent before results, and 6 percent move after, it now up about 10.5 percent in total, to $1,615.

The revenue guidance is very impressive to me and there is plenty to like in the quarter, well have to see where estimates going forward start coming. If we start getting meaningful revenue upgrades, then an argument can once again be made that Amazon as plenty of room to continue rising.

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Microsoft

Microsoft also reported strong results as well, with earnings beating estimates by $0.10, coming in at $0.95 per share, while revenue also top expectations coming in at $26.82 billion, vs. estimates of $25.78 billion. Again very strong numbers, and impressive levels of growth. Microsoft is basically unchanged in the after hours.

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0 For 5, What!

So lets see I’m gonna give myself an 0-2 as a follow-up to my five stock prediction article.   It makes my total predictions at 0 for 5, with the immediate after hours market reactions. But in all fairness, lets see where all these stocks are in a weeks time.

Beside I am right sometimes aren’t? LOL. Of course, I am, I nailed Visa, eBay, Intel, Qualcomm, Verizon, American Express, Netflix, to name a few. Look we all get things right and wrong, it is just the way it goes. You have to go with the flow.

Anyway, moving on then.


Intel

Intel reported a big beat, and the stock is also rocketing higher following results, and I continue to think this one is heading towards, $60. I targeted that level back in December. intel

I still think SQ has further to fall as well, perhaps towards $42.

dquare


Visa

Visa had a big day, and is trading at all-time highs, I think a rise above that upper trend line, accerlates the rise. The numbers were that good. I think upgrades are still to come.

visa


MasterCard

Pretty much where Visa goes, so too does MasterCard, so I expect good results from MasterCard as well, and could it too could be getting ready for a big push higher.

mastercard

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GE

Did you notice where GE stopped rising? Yeah at $14.85, I swear you really can’t make this stuff up!

ge

Good night, and thanks for reading!

-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: #stockmarket #ge #amazon #Microsoft #visa #mastercard #intel 

The Stock Market Faces A Critical Test The Week of April 23

The Stock Market Faces A Critical Test The Week of April 23

The Stock Market Faces A Critical Test The Week of April 23

Michael Kramer and the Clients of Mott Capital own shares of NXPI, V, and SBUX

The week of April 23 will be a big week for earnings, and I already highlighted in my five predictions for earnings the outlooks for AMD, Alphabet, Microsoft, Facebook, and Amazon. But there are plenty of others such as Intel, Qualcomm, PayPal, Visa, Ford, General Motors, Starbucks, Exact Sciences, and the big Oil companies Exxon and Chevron.


Earnings Outlook

Yes, earnings do matter, and more important will be those outlooks for the coming quarters. According to data from Dow Jones S&P Indices, earnings are expected to climb by 40 percent in 2018 to $153,90 from $109.58  in 2017, that is a massive rise in profits, for one-year, and that leaves the S&P 500 trading at 17.35 times 2018 estimates. Earnings are seen climbing another 10 percent in 2019 to $168.64 and that leaves the S&P 500 trading at 15.8 times 2019 estimates. What do you think happens to those estimates should earnings be better than expected? That is right, full-year numbers come up; if they are weaker than predicted those estimates come down. In both cases, we find out stocks are cheaper than or more expensive than we thought. So how big are earnings and the outlooks? Very big.

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Chips

Semiconductors have been hammered over the past week, and with Intel, Texas Instruments, and Qualcomm reporting we are going to get a perfect sense if Taiwan Semi was a one-off, or if there is more pain in the group to come.

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Intel

Intel has been trending higher, and the relative strength index looks like a loaded coil, ready to pop. Meanwhile, the trend is overwhelmingly bullish, and that makes me think the stock pops higher.


Qualcomm/NXP

Qualcomm is near the low-end of the range, and perhaps we get some good news this week on some progress regarding the NXP Semiconductor deal. The NXP deal is a massive deal for Qualcomm and is extremely important to drive future revenue growth for the company.

qualcomm

As a shareholder of NXP, I’d love to get my $127.50 per share, from Qualcomm. But I’m more than okay if they don’t, because I continue to love this company going forward as a standalone, especially when trading 12.5 times next year earnings.


Starbucks

Starbucks has been trending higher, but every quarter has been met with disappointment. It will come down to same-store comps, and growth in China this quarter.

Despite all the headwinds this company has faced, an all-time is within reach.

 


Exact Sciences

Although my trading channel may be to narrow, the direction of the trend seems to be one way.


PayPal

The trend in PayPal is lower at this point, and the RSI is trending that way as well. Support at $73 is extremely important in this case, should PayPal fall.


Visa

Visa has been in a channel now for some time, and it appears shares and the RSI have both broken out from a downtrend, with a positive setup in place.

visa

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Exxon

Exxon shares can’t get out of a long-term downtrend, and while support at $72 held, this stock is not going anywhere until it breaks above that downtrend.

xom


Chevron

Chevron may have room to rise towards $135.

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Ford

I think the Ford chart is self-explanatory.

That is gonna be it. Good Luck

 

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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: #stockmarket #sp500 #amazon #facebook #amd #alphabet #microsoft #earnings

5 Monster Stock Predictions For Earnings During The Week of April 23

5 Monster Stock Predictions For Earnings During The Week of April 23

5 Monster Stock Predictions For Earnings During The Week of April 23

Michael Kramer and the Clients of Mott Capital own shares of GOOGL

With earnings seasons underway, the intensity picks up in a big way this coming week, with Alphabet kicking things off this Monday afternoon, and then companies like AMD, Qualcomm, Facebook, PayPal, Amazon, Microsoft, and Intel later in the week. I have highlighted and attempted to predict the direction of the stocks following results, for five stocks, Alphabet, AMD, Facebook, Microsoft, and Amazon. Hope you enjoy, and good luck.

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Alphabet

Estimates

Shares of Alphabet have a one-year forward PE ratio of about 22, putting it among some of the cheapest technology companies. Analysts are looking for the company to report that first-quarter earnings fell by 7 percent to $9.28 per share, while revenue is expected to climb by over 22 percent to $30.26 billion. Revenue estimates have been creeping up since the start of the year, from $29.43 billion, according to Ycharts, a rise of 1.78 percent.

Options

The long straddle options strategy for expiration on May 18, are not pricing in a massive move in Alphabet shares, a rise or fall of only 7 percent, placing the stock in a trading range of about $1000 to $1150 from the 1,075 strike price.

The implied volatility is currently around 47, and that suggests a one standard deviation move of about of 6.5 percent, so again not a huge move.

Technicals

The technical’s are sending mixed signals, but that seems to be the case with every stock chart these days. The stock price recently filled a gap at $1,096 but failed to break above that resistance level. But there is a clear uptrend in the chart currently, and the $1,000 level acted as a firm support level during a time that saw very high volume levels. Additionally, it is clear that volume declined as the stock settled in around $1,000 support, which would suggest that selling pressure was easing, resulting in the stock move higher. Additionally, the relative strength index (RSI) reached an oversold condition in mid-February, and that lead to an RSI that is rising and trending higher, while the downtrend in the RSI had been broken.

googl

Price Target

The average analyst price target would suggest a rise of about 17 percent, to $1275.

The underlying technicals are bullish; the options market seems not to be looking for a big move in shares of Alphabet either, which likely implies no big surprises, while analyst trends in revenue and earnings have been relatively steady.

It would seem to suggest to me that the market is set for shares of Alphabet to rise post-earnings.

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AMD

Estimates

AMD is expected to report on April 25, and analysts estimates are expecting revenue to rise by 59 percent to $1.566 billion, while earnings are forecast to be flat at $0.09 per share. That doesn’t give me a warm and fuzzy feeling. It would suggest two things going into these results, a risk of a significant miss or a significant beat. But based on the latest set of results from Lam Research and Taiwan Semi, it makes me a little bit concerned for a miss; there seem to be a tremendous amount of operational risk here such as declining margins, or revenue falling short.

Options

The options market appears to agree, because the long straddle options strategy is pricing in a rise or fall for the stock of 13.7 percent by expiration on May 18, from the $10 strike price. It places the stock in a trading range of $8.65 to $11.35.  The puts at the $10 strike price out weight the call by a ratio of nearly 2:1 with 51,000 open put contracts to approximately 25,000 call contracts, again a bearish indication.

The term structure of the implied volatility implies a tremendous amount of volatility too. The near-term options have an implied volatility level over 90 over the next seven days, and that also means a rise or fall in the stock about 12.5 percent.

Technicals

The technical chart is also bearish at this point, with a clear downtrend in place, while failing at resistance at $10.70. The RSI is also trending lower, while volume levels have yet to reach a capitulation type of moment.  Should the stock rise on better than expected results a jump to $11.70 seems possible, while bad results could see the stock fall to early April lows around $9.

Analyst Price Targets

The average price target on the stock has been trimmed since the start of the year falling to $13.77 down from $14.04, a decline of nearly 2 percent. Meanwhile, of the 31 analysts that cover the stock 35 percent rate the stock a “buy” or “outperform,” while 45 percent rate it a “hold,” and 19 percent rating it an “underperform” or “sell.”

All of these signals appear to be negative and suggest the market seems setup for shares to fall post results.


Facebook

Facebook’s results are going to be huge, as investors await commentary on the fall out from the Cambridge Analytica data scandal.

Estimates

Analysts are looking for Facebook to report that earnings fell by 1.75 percent to $1.34 in the first-quarter, while revenue is seen rising 42 percent to $11.42 billion. Facebook naturally will significant expenses in the future when it comes to putting more staff in place to better monitor what is happening on its platform. In fact, analysts have trimmed their earnings results for the quarter from $1.38 per share since March 19.

Options

The options market has an implied volatility of roughly 55 percent, and that suggests a one standard deviation move of about 7.6 percent, putting the stock in a trading range of $153 to $179.

Technicals

The technical chart still has a solid downtrend in place, but the big volume levels in the stock around $150, also suggest a current floor in the stock. The RSI also hit oversold levels at the end of the March, but, it too still has a solid downtrend in place.

facebook

Other Factors

Rising cost continues to be a significant issue for Facebook going forward, while it is also unclear how users are responding, and the overhang of potential regulatory issues loom.

It would not be surprising to see a retest of the $150 lows following results.


Microsoft

Estimates

Analysts estimates see Microsoft earnings climbing by 16.5 percent when it reports fiscal third-quarter results to $0.85, while revenue is seen jumping by only 9.5 percent. Analysts are bullish on Microsoft and have been raising their price target on the stock since the start of the year, pushing the price target to $105.71, up by 13.15 percent since January 5, from roughly $93.40.

Options

The options market is not implying a big move in shares of Microsoft post results, with an implied volatility of roughly 44 percent. It represents a rise or fall of 6 percent. The $95 Calls set for expiration on May 18 outweigh the puts by a ratio of 9 to 1, with almost 39,000 open call options versus 4,000 put contracts. The number of open call contracts is a sizeable dollar bet at that strike price worth nearly $11.8 million.

Technicals

The chart is sending bearish indications, with an RSI trending lower and falling volume levels as the stock price continues to rise, two bearish divergences. Meanwhile, the long-term trend is higher though, and that is a still a bullish signal.

The options market and analysts price target are both overwhelming bullish, and with such a big jump in revenue during the quarter, it may not be too hard for the company to top earnings estimates. The real test will come should shares be able to breakout technically and rise above $97. Be mindful of a gap higher following results, only for that gap to be refilled.

microsoft


Amazon

Estimates

Amazon’s stock is up nearly 31 percent on the year and has been among the best-performing stocks in the market. Analysts estimates are looking for revenue to have climbed by 41 percent, to $49.92 billion, while earnings are seen falling by nearly 18 percent to $1.22 per share. Amazon has a history of being incredibly inconsistent when reporting earnings, with either big beats or significant misses. It all comes down to how much the company is investing in R&D and such during the quarter.

Options

The implied volatility is at 61 percent, and that means shares could rise or fall by 8.5 percent, putting the stock in a trading range between $1398 and $1656. The options set to expire on May 18 at the at the $1530 strike price have put to call ratio of about 1:1, with 4,900 open call contracts to 4,500 open put contracts.

Technicals

There is a long-term uptrend in the stock, but the RSI has turned bearish, with the RSI trending lower. There was a significant surge in volume when shares reached $1360, and that would seem to be strong support for now. But with the divergence in the stock price and the RSI, it would suggest that shares still have further to fall, after results.

amazon

Hope you enjoyed the 5 predictions for earnings for the coming week.

-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: #stockmarket #sp500 #amazon #facebook #amd #alphabet #microsoft #earnings

stock market apple iphone suppliers

Here We Go Again, Bring On The Apple iPhone Worries


Here We Go Again, Bring On The Apple iPhone Worries

Michael Kramer and the clients of Mott Capital own shares of GOOGL and TSLA

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I talked yesterday about the importance of today’s trading action, and for the most part, the market’s decline on the day doesn’t come as a surprise. The Algo’s just weren’t ready to let the S&P 500 breakout, plus with the negative headlines out of Taiwan Semi, and the pressure it put on Apple and its suppliers, it was too much to overcome.

But the charts tell a tale of markets that retested support at 2,691 and for the most part that held, and the S&P 500 managed to close above it. The action in the market today, was nothing that terrible or anything to be too worried over.

SPX

The VIX was up just a touch to about 16, again, nothing alarming.

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Technology Stocks

The technology sector also tested support today, around $67.11, and held, and that is also a positive.

technology


Semis

So I guess I’m surprised by the markets reaction’s to Taiwan Semi noting soft smartphone demand. But is this new? Didn’t Broadcom tell us this back in March after reporting results, and February when they revised guidance, that they saw weakness in Wireless? Has it deteriorated that much in about four weeks? Anything is possible, but the fact that Apple iPhone demand is weak is surely not news.  Apple reports on May 1, so you have a good week of the market going back and forth over this.

Don’t forget the same exact thing happened last quarter going into Apple’s reports, let’s see where this goes.


Tesla

Tesla had a nice uptick on a down day; all these emails mysteriously keep leaking out about Model 3 production rates. Coincidence? Doubtful.  But it is undoubtedly worth nothing when a stock goes up on a weak trading day. Perhaps the buyers are returning.

Alphabet

Alphabet is another stock that pieced together a good day of trading as well, with the stock nearing $1,100. The company reports on Monday after the close, and I would not be surprised to see if shares continue to rally going into the earnings print, Monday after the close of trading. The stock is among the fastest growing of the top 25 stock in the Select Sector SPDR Technology ETF, XLK, and it carries a one-year forward PE ratio of only 22 times 2019 earnings estimates of $48.40.

Alphabet is expected to deliver earnings and revenue growth of 15 to 16 percent in 2019 and 2020.


Microsoft

But then there is Microsoft trading at 24.3 times 2019 earnings of $3.95 per share, while it is forecast to grow earnings and revenue by only 8.5 to 9 percent. By the way, how have investors not roped Microsoft into this whole social media, advertising,  Facebook regulatory issue? Does Microsoft not own Bing? You know the search engine.  They also own that small social media thing, you know, LinkedIn, the one that collects users professional and career data.


General Electric

Tomorrow we get GE’s earnings, and from a market standpoint I doubt it matters. But the stock is running out of room to rise at this point, with a downtrend around 14.25 and resistance around 14.95. For now, the trend is still lower, and unless management comes out with something very positive and unexpected, the current downtrend likely remains in place.

ge

That is it; I have a pounding headache.

-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: #stockmarket #sp500 #microsoft #alphabet $tesla $technology #apple #suppliers

 

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

oracle

Prepping For Micron and Oracle, Plus Microsoft and Broadcom


Prepping For Micron and Oracle, Plus Microsoft and Broadcom

As the week draws to a close the stock market didn’t have a remarkable week, in fact, the S&P 500 was down by about 1 percent for the week. But stocks showed some strong trends on Friday which suggest next week is likely to see gains.

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The S&P 500 continues, for now, to trend higher, putting in a series of higher highs, and higher lows, and as long as that trend continues then the index is likely heading back towards 2,880 over time. The index may rise towards 2,810 next week.

stock market S&P 500

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Micron

One would never know the market was down this week, looking at shares of Micron, the stock jumped by over 11 percent on the week, and is now resuming its uptrend as well, going into earnings next week.

micron

The stock got another significant upgrade today this time from Baird, with the price target rising to $100 from $60, on stronger than expected trends in memory. The actual revenue and earnings estimate trends for the consensus have remained relatively flat, with revenue estimates rising by about 3 to 4 percent for 2018, 2019, and 2020, versus a stock that has climbed by 42 percent. Earnings estimates are trending higher since the start of 2018, up 7 percent for 2018, 5.5 percent for 2019, and 3.5 percent for 2020. But again the stock is up way more.

MU Chart

MU data by YCharts

That would suggest that investors are expecting the earnings multiple to keep expanding, and it has, rising from below 5 to 6.85. How much more is the market willing to give it? We might find out next week.


Oracle

Oracle also reports next week, and I found it interesting that somebody opened a position in the April $57.5 calls. The trades weren’t huge, just over 13k contracts. But with the company reporting Monday after the close, it caught my eye.

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Alphabet

Have you notice Alphabet trending lower, it got right to resistance, at $1,175, where the gap was created post-earnings, and it has been trading lower since.

alphabet

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Microsoft

Microsoft had some exciting news, about a new division within the company that would be cloud-based gaming.  The article notes Microsoft is looking for gaming to grow to 2 billion users globally, and a new cloud-based subscription service could help Microsoft reach them. In a Netflix subscriber world, the opportunity could be enormous, with only the hurdle being pricing potentially, but it sounds very cool.


Broadcom

I was surprised to see Broadcom trade down today, but it looked more like fill the gap-type day while retesting the downward trendline breakout. I still think shares go higher.

broadcom

That it is 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.

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Tags: #sp500 #microsoft #broadcom #micron #oracle #GOOGL

Chip Stocks Monster Week, Plus Micron, AMD, Netflix, Visa and Microsoft


Chip Stocks Monster Week, Plus Micron, AMD, Netflix, Visa and Microsoft

Believe it or not, the S&P 500 was up by about 3.25 percent for the week! An unexpected gain, with most of it coming on Friday. The semiconductor stocks ($SOXX) led the charge with the group up by nearly 5 percent, followed by Industrials ($XLI), and Biotech ($IBB). Outside of consumer staples ($XLP) and utilities ($XLU), it was a good week for all.

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^SPX Chart

^SPX data by YChart

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Chips Stocks

Look at the chip stocks! Wow. We aren’t even though the first quarter and look at these significant gains. Micron, Microsemi, MKS Instruments, Qorvo, Nvidia, On, astounding, all up over 20 percent. Of the top 25 stocks in the SOXX ETF, only two are down for the year, Qualcomm and Broadcom.

Micron

I was surprised to see how poorly Micron performed today, after a strong week. The momentum has been strong, and one has to wonder why the momentum suddenly came out of it today? micron


AMD

On the other end of the spectrum, AMD is a stock that has gone nowhere. Don’t be fooled by the stock being up by 16 percent in 2018. The stock is actually down nearly 12 percent over the past 52 weeks. The earnings growth appears to be present, with earnings in 2018 expected to rise by over 117 percent to $0.37, followed by $0.52 in 2018, and $0.58 in 2019. Even revenue is expected to grow from roughly $6.3 billion in 2018 to $7 billion in 2020. But the stock won’t budge. The only problem I see with it is that for a chip stock it is expensive at 22.6 times one-year forward earnings. That is a lot, for a stock in this space, especially for one that’s name is not Nvidia.

AMD Chart

AMD data by YCharts


Microsoft Or Visa

Out of all the stocks that make up the SPY ETF top 25 holdings, I never would have guessed that Microsoft at 24.3 times one-year forward earnings estimates was the second most expensive stock behind Amazon. Followed by Alphabet at 24.06 and Visa at 24.03.

Microsoft is trading at all-time highs, but one has to wonder just how Microsoft is a better buy then say Visa presently, at the same earnings multiple. Microsoft is expected to grow its earnings by 8 percent in 2019 to $3.64 from $3.95. Meanwhile, Visa is expected to increase its earnings by nearly 17.5 percent from $4.41 to $5.18. If the bet for Microsoft is blockchain for example,  and that is going to be a way to transact in the future, Visa and MasterCard are going to be involved in some way shape or form, don’t you think?

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Amazon and Netflix

Amazon and Netflix continue just to lead the consumer names, and can you wonder why? These two companies are just loaded with future growth. But the pace they are both rising in 2018, just leaves me lost for words.

AMZN Chart

AMZN data by YCharts

As I have said before I own Netflix, and I am more than happy for the stock to rise over time, but 72 percent in the first six weeks of the years, seems like a bit much. Keep in mind; I’m the guy that wrote Netflix was cheap after it reported results in the middle of January. Then I took it one step further and said shares could rise to $355. But the pace of the rise makes me feel uncomfortable, and you are right I could sell it. But I do believe this is a multi-year growth, and even at its current price, it likely has much further to rise over time. This a global growth story in a way that has never happened before. I’d take a month or two of sideways consolidation at this point.

Tomorrow we’ll take a look at the week to come.

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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: #sp500 #chips #micron #nvidia #amd #visa #microsoft #amazon #netflix

 

 

 

 

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Biotech and Tech Stocks Are Approaching Make Or Break Moments


Biotech and Tech Stocks Are Approaching Make Or Break Moments

The stock market picked right up from where it left off last week, with the S&P 500 continuing to surging to 2,721 up about 1.1 percent today. Based on the charts, it seems like we have a pretty good shot of continuing to rise to somewhere between 2,740 and 2,760 before we see a significant region of resistance again.

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S&P 500


Yields

I still think 10-year treasury rates continue to decline, and I still believe we see a push down back towards 2.6 percent. The chart has turned, and it seems a new trend lower has formed.

treasury yields

Inflation Watch

The inflation number to watch this week will be average hourly wages released during the Job report on Friday morning. According to Bloomberg, estimates are calling for y/y hourly wage growth of 2.9 percent, and consensus is in a range of 2.8 to 3.0 percent.

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Biotech Sector

The NASDAQ Biotech ETF IBB has an unusual setup in the chart, with resistance at $111.50. The formation doesn’t look the greatest. In fact, should it the ETF fail again to rise above $111.50 I would grow very concerned about the future direction of the group.

biotech

The same setup is confirmed in the XBI as well. what had once been a promising year is beginning to look worrisome.

biotech

It is always important to watch how stocks “act” in a big up day, especially when there is buying across all the sectors. But look at what stocks hardly budge. Celgene, Biogen, and Gilead. Only Amgen performed well of the big biotech names, and that seems concerning. It likely means all the sellers have not been shaken out of the group yet.

Biogen shares are trying their hardest to bottom. The relative strength index (RSI) is near oversold levels at roughly 33. There is a slight hint of the RSI starting to trend higher while the stock price continues to test the lows, which could be a bullish divergence. But it may be a bit to early to say for certain.

biogen


Technology

The technology ETF (XLK) has the making of what appears to be a double top. It makes the $69.25 level of critical importance. The RSI has been trending lower for sometime with a series of lower highs, and lower lowers. Again, we need to see the XLK continue to rise, in the near-term, and rise above $69.25.

technology sector

Apple

Apple has the making of a similar double top, although it is not nearly as pronounced as the XLK.

apple

Microsoft

Microsoft is another example, with the same double top setup. It makes the $95.25 level extremely important for the stock. Notice how the RSI has been trending lower, while volume has been steadily declining. To confirm a breakout at $95.25 we need to see a meaningful surge in volume. On the other side, should MSFT fall below $85, it would likely be confirmation of the double top pattern.

microsoft

NASDAQ 100

The biggest problem is that NASDAQ 100 is exhibiting the same pattern.

ndx

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Micron

One stock that has broken out is Micron. I noted over the weekend the importance of $50, and it easily broke out today, surging by nearly 6 percent. Notice how volume surged and has been steadily increasing since early February, along with a rising RSI. As we have noted it before, the stocks next stop could be around $58.

micron

Netflix

Netflix is also in breakout mode, with  its shares climbing today as well, and are now at $315, up nearly 4.5 percent. Notice again increasing levels of volume, and an RSI trending higher.  The stock got another price target upgrade today, this time it was Macquarie. The firm raised it price target to $330 from $276.

netflix

I hope I was able to show the subtle difference in the charts, and why I have some level of concern and will be keeping a very close eye on things.

That’s 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 #micron #microsoft #biotech #celgene #biogen #gilead #amgen #netflix #micron #technology #yield

job report, microsoft, qualcomm vote, roku, micron

Micron, Microsoft, Qualcomm Vote, Job Report – The Week Of March 5th


Micron, Microsoft, Qualcomm Vote, Job Report – The Week Of March 5th

This coming week should be exciting, with ADP on Wednesday and BLS Job report on Friday morning. Has it been a month already? It feels like the other day the market was freaking out over “the hot wage” reading. Mind you the reading was a 2.9 percent rise in wages for January. It was 2.83 percent September, but nobody cared about the wage number back then.

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It is sad that wages grew at 2.9 percent in January and that was the highest reading since May of 2009.


What Happened To Wage Growth

This next chart will demonstrate how bad it has been now for years. Can you believe there was a time when hourly wages were rising at 9 percent a year? Look at that, true we had inflation issues in the 1970’s. But look at the growth in wages in the 1990’s. Now, look at today.


Shifting Workforce

The next chart shows us what has been happening to our workforce through the years. In 1970 Manufacturing jobs were the most prominent part of the labor force, with roughly 18 million workers, now it is about 12 million. Meanwhile, leisure and hospitality jobs have risen from approximately 6 million to nearly 16 million today. Retail trade in 1970 7.4 million, today 15.8 million.

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Shifting Wages

The jobs that pay the highest hourly wages Construction, Professional and Business services, while Retail and Hospitality pay the lowest. Durable goods and manufacturing are the third and fourth highest. Over the years, the economy has shifted from higher paying jobs, into lower paying jobs. It seems pretty clear, as to what has happened. 

 

Stocks

Obviously, this coming week will be critical to hear what the latest developments on the tariff situation and we should get more clarity this following week. The news around the tariff likely takes center stage, until Friday, when the only that might matter is Job report.

But we need to see the stock market continue where it left off on Friday. We are going to want to see a strong opening on Monday, and a solid follow through during the day.

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VIX

The vix is another important to gauge; we need to watch the vix spot vs. the future contracts. The chart below shows its nicely. Notice starting from the bottom with the purple line, the VIX spot is the cheapest, followed by the orange line (APRIL), Red (MAY), Green (JUNE), Purple (July), make sense? But notice how the market goes into backwardation at the start of February and where June become the cheapest, followed by July, May, April and then the Spot. Just keep an eye on this, it could be something to watch should the stock market start going off the rails. It tells us what the market is thinking regarding the future of volatility

^VIX Chart

^VIX data by YCharts


Micron

Micron could be on the verge of a massive breakout should be it able to rise above $50, and could see its shares rise to levels not seen in nearly two decades, back to $58.

micron

Roku

Roku appears to be on the verge of a major breakdown, that could send shares back into upper 20’s.

roku

Microsoft

Microsoft, found support at the previous downtrend, but will it hold? It also failed at resistance at $93.25, Microsoft will be an important one to watch? Does it break out or break down?

microsoft


Broadcom

It is a big week for Broadcom, with Qualcomm’s shareholder vote on Tuesday. Will Broadcom get its nominees on to Qualcomm’s board?

broadcom

The stock held support at $241, now where does it go? It will likely depend on the outcome of the Qualcomm board vote this pending week. Right now the options market is not looking for a deal to get between the two companies. The long straddle options strategy is looking for a rise or fall of only 11.7 percent, putting the stocks in a trading range of $57.5 to $72.5 by expiration on April 20.  The open interest for the $75 calls is relatively small at approximately 40,500 contracts, a notional value of only $2.8 million. Does Broadcom succeed at buying Qualcomm? Probably not.

qualcomm broadcom

 

That is it. Good Luck this week.

 

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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 #micron #microsoft #roku #qualcomm #broadcom #jobs 

stock market roku

Stock Market Sell-Off Continues, More To Come? Plus Breaking Down Roku’s Results

Stock Market Sell-Off Continues, More To Come? Plus Breaking Down Roku’s Results

The stock market gave back gains and managed to finish in the red, with the S&P 500 falling by 55 bps, and closing at 2,701. It puts us right on target to test the 2,690 level tomorrow if we see a continuation of the market sell-off that started after the Fed minutes.

In my opinion, it is not worth getting into the whole roller coaster ride after the Fed minutes. The minutes are old news and based on economic data before the infamous labor report on February 2. But the volatility provided in the marketplace after the results gave us with some critical insights regarding levels in the market.

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2,691

s&p 500

The chart shows that the S&P 500 has now failed two times at 2,742, and a move lower to 2,691 seems far more likely now. My expectations are for 2,691 to offer the market a far stronger level of support than 2,713. I have been writing about this now for the last few days, and the questions become what if 2,691 doesn’t hold? 2,633 is the next area of support. a decline of another 2 percent.

But as we go through the list of the usual suspect companies, you will likely begin to get the feeling there is more downside risk here than just 2,691, and a decline to 2,633 seems to be in the works.

Microsoft

Microsoft shares gave in today, and for the first time are beginning to exhibit what I have been writing about. It seems like the stock could be set to decline towards $85.50 and looks probably likely.

microsoft

Amazon

Amazon is trying its hardest to meaningful break to new highs, but $1,500 is proving not to be an easy level for the stock to breach. I have written over the past several days I think the direction of the stock is lower, and I think that is the case. I will admit, at one point around 2 PM, I was thinking about how I was going to have to write how wrong my call on Amazon has been. But for now, I live to fight one more day.

amazon

Netflix

Netflix also can’t break to new highs, and $287 has seen a wall of sellers. Again, like Amazon, it looked for a moment shares could breakout, but that faded quickly. I am long Netflix and would like nothing more but for the stock to breakout, but I also realize shares are up tremendously in 2018 and if shares should decline to say $250, it is surely not the end of the world. But then again, I own it below $100, and I’m invested for the long-term, so my thought process is different here.

netflix

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Apple

Apple also can’t seem to get any forward momentum and has stalled, hitting a wall of sellers at roughly $175. Again the chart looks like the stock is tired, fatigued and likely headed lower. $168 is critical, a decline below $168, sends shares below $160.

apple

Roku

Roku was a disaster after hours, with the stock down 20 percent and trading back to $40. Shares had a big run-up before results, but that came crashing back to earth after results. These numbers, in my opinion, were terrible all around. Sure top line and bottom line beat on the current quarter, but guidance for the first quarter fell short of expectations, and personally, if you can’t even meet revenue expectations for the one quarter out, how can I expect revenue guidance for the full-year to hold?

The player segment, the actual device, showed that sales decline y/y by 7 percent, which is just amazing. This is supposed to be a growth company, that was getting a premium valuation. The fact that y/y player sales declined in the fourth quarter is astonishing.

The fourth quarter should have been a blowout given all the hype around Netflix and all these other streaming outlets. People should have been buying these device players like crazy. But no, Roku players sales declined, and it tell you three things. 1) The business has already peaked, and that means Roku will need to become more dependent on the platform revenue. 2) pricing pressures from other streaming players, like Alphabet and Amazon are having a significant effect on Roku devices. or 3) people do not them because every TV sold these is basically smart.  Meanwhile, margins on their player segment fell from 14.3 percent in the fourth quarter of 2016 to only 9.5 percent in the fourth quarter of 2017.

I don’t care if they are purposely trying to sell the lower priced players or not, it speaks of pressure they are getting from the likes of the other device makers. If they had pricing power or where not being undercut, they would not have to purposely try to push only the cheaper players.

Apple’s iPhone sales are a perfect example, I wrote about in an Investopedia article. Apple raised the price of the iPhone X substantially, despite plenty of competition from Samsung and the likes. But it had a  minimal impact on the number of iPhone sold while driving higher revenue. It is because Apple has pricing power and can demand a higher price for their product, Roku can not.

If Roku player sales are peaking and those numbers are declining, then what does it say to adding more users to the platform? Undoubtedly not a positive as well for future growth. If they are not interested in maximizing hardware revenue or gross profit, then they might as well give the media product away for free. That would start adding the users to the platform, right?

To make matters even worse, the platform revenue shrank as a percentage of total revenue on a sequential basis from 46 percent of revenue to 45 percent of revenue. Platform gross margins also fell year over year and sequentially by 300 bps to 74.6 percent from 77.5 percent.

This company was valued at nearly $5 billion going into this report and was trading at almost 5.5 times 2019 sales estimates of $862 million. Roku is a hardware company trying to become some kind of hybrid advertising platform. Apple trades at 3.3 times one-year forward sales, while Alphabet trades at 5.8 times one-year forward sales. Apple is the hardware company, Alphabet is the advertising platform. Do you think Roku given these results is deserving of multiples that rival Alphabet and Apple? I sure don’t.

Maybe I’m naive and simply “do not understand.” But then again, I’m the guy that came up with the on-demand generation and has been screaming for Disney to launch its own direct to the consumer product. But what do I know?

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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: #sp500 #stock #microsoft #amazon #apple #netflix #roku

 

 

amazon netflix microsoft s&P 500 stocks

Amazon, Microsoft, and Netflix Showing Sign Of Fatigue

Amazon, Microsoft, and Netflix Showing Sign Of Fatigue

To follow up on the weekend commentary, Amazon, Microsoft, and Netflix are continuing to show signs of weakness. In fact, today’s trading action, despite mild gains, actually strengthen that argument as each stock failed at crucial resistance levels. Plus I take a mild victory on NXP Semiconductor

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S&P 500

The stock market traded slightly lower today, with the S&P 500 down by about 60 bps, to 2,716, bring the S&P 500 down to our first support level around 2,713.

S&P 500

The chart above shows how the S&P 500 bounced right off, 2613, and managed to close right above it. Over the weekend, I wrote that the S&P 500 might fall to 2,691 to and I still believe that is the case, over the next couple days. Again, let me emphasize I am not saying or calling for the start of some massive sell-off, this, in my opinion, is just merely a minor pullback, in what has otherwise been a sharp and robust rebound. But if support fails and the index falls below 2,691 the story changes.

Amazon

amazon

Amazon finished the day higher by about 1.36 percent, but again Amazon continues to look extremely toppy here, and once again, the stock topped out along resistance and has yet to break above its previous highs.  To make matters worse for Amazon, we can see the stock had a relatively sharp sell-off of about 1 percent over the final hour and half of the day.

amazon

Additionally, if the stock fails to break to new highs, it could be a sign of a double-top forming on the daily chart. For now, the warning signs for Amazon, are a failure to rise to a new all-time high and a drop below $1,425. Should Amazon’s price fall below 1,425 shares likely fall sharply lower, perhaps to $1,250.

Notice volume was consistently rising for Amazon starting at the end of 2017, and it has been steadily declining even as the stock has rebound, again a bearish sign in my book.

Watch for these levels and these areas of interest. To be clear, I am NOT saying Amazon is about to enter some giant bear market, or this the all-time high’s never to be seen again! NO! I am merely suggesting that the stock may have a pullback over the next few weeks to months, and now is likely to err on the side of caution.

Microsoft

Microsoft also rallied 90 bps today, but look at that chart below, again failing right at resistance. You saw the chart from over the weekend. I don’t make these things up!

msft

If shares can clear $93.50, it is a sign that I am wrong, and the stock could continue to rally. That trendline is of critical importance to watch.

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Netflix

Netflix is the same scenario, also nearing a technical breakout/breakdown. Again, Netflix like Amazon must make a new all-time for any rally to continue to over the short-term. If shares are unable to rise above $287.50, it would suggest that the stock will fall and likely test support around $250.

netflix

NXP/Qualcomm

After a year of writing about the topic, Qualcomm has finally up its bid for NXPI to $127.50 or $44 billion.   I’m going to give myself a well-deserved pat on the back because it was in June, I said that Qualcomm would need to raise its offer $45 billion. Pretty darn close.

The most entertaining thing about the new offer? The tender closes on March 5, at 11:59 PM. Remember Broadcom is nominating people to run for Qualcomm’s board of director at the shareholder meeting. Broadcom made it quite clear they opposed Qualcomm upping its bid for NXPI. So what does Qualcomm do to fend off Broadcom, what they had too, up the bid. The best part, guess when that shareholder meeting is? You guessed it, March 6.

Talk about a kick in the teeth!

That is it! Good Luck

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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: #sp500 #stock #microsoft #broadcom #qualcomm #nxpi #netflix #amazon

 

S&P 500 Amazon Microsoft Apple Tesla Broadcom

Amazon, Apple, Microsoft, Netflix May Fall, Tesla & Broadcom May Rise

Amazon, Apple, Microsoft, Netflix May Fall, Tesla & Broadcom May Rise

It will be a shortened trading week for the stock market, with the President day holiday, but it should be anything but slow. The S&P 500 has rallied by 200 points since bottoming on Friday, February 9, a rise of 8 percent. But we could see the rally pause this week and take a bit of breather.

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The 5-minute chart shows how the S&P 500 stalled at the end of the day on Friday, options expiration,  and was unable to close at the highs of the day, with resistance at 2,742 proving to be too strong. It would suggest the S&P 500 is set to fall slightly, at least at the start of the week to roughly 2,690, a decline of approximately 1.5 percent. Should 2,690 hold, which is my expectation, a rise higher would continue from that point.

S&P 500 stock market

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Amazon

Amazon is likely not finished falling and could retest its 200-day moving average again around $1,300, in the not too distant future. We can see that in the chart the relative strength index has now been trending lower, despite the stock moving higher, a bearish divergence. Additionally, the recent price rise higher came on declining amounts of volume, which would suggest that buyers do not have the same level of conviction as the previous surge higher.

amazon

Additionally, the stock failed at resistance at $1,470 and the previous trend higher also acted as a resistance level. Again more bearish indications.

If that wasn’t enough, the stock is trading at peak valuations on a historical basis as well. As noted in an Investopedia article I wrote during the week, each time the stock has risen above 2.4 times one-year forward sales it has seen its stock decline.

Microsoft

Microsoft is not all that different than Amazon, with an RSI that is also trending lower, despite  a rising stock price. The stock looks set to decline to roughly $85.50, where it should find a meaningful support level.

Apple

Apple like the others is exhibiting the same patterns, with an RSI trending the wrong way. The best case scenario is for Apple to test that lower uptrend again, which is now around $160.

aaple

Netflix

Netflix is no different, with a divergent RSI, and waning volume levels each day following the lows. It likely indicates shares could be set to fall, perhaps to around $250.

nflx

Tesla

Tesla shares could look to continue to rise, and unlike the other stocks, it has an RSI that is trending higher, and again was able to test the $290 -$300 support level. The stock has been able to rise above the multi-month downtrend as well, another positive. Tesla never got to the extreme overbought levels either.

tesla

Tesla, unlike Amazon, is also trading at a historical discount on a one-year price to forward sales ratio. The last time Tesla was trading a ratio this low came two-years ago in February of 2016 when it was trading at 1.77 times one-year forward sales estimate. Now it trades at only 1.97 times forward 2019 forward sales estimates of $26.51 billion

TSLA Chart

TSLA data by YCharts

Broadcom

With the odds of Broadcom acquiring Qualcomm continuing to dimish, the stock is starting to reflect life without Qualcomm. With that, the stock has found a meaningful bounce off of support at $227, and the RSI has broken out of a multi-month downtrend. A breakout would come if the stock rose above $260.

broadcom

Shares are also historically cheap trading at less than 12 times one year forward earnings estimates of $15.30. The company issued strong guidance in just two weeks ago.

AVGO Chart

AVGO data by YCharts

Qualcomm

If the Qualcomm/Broadcom deal is dead, then Qualcomm has no right trading at $65, and likely reverts to the low $50’s. The company still has an on-going litigation with Apple, while analysts are looking for earnings to decline by nearly 20 percent in 2018 to $3.46, while revenue is expected to drop almost 5 percent to $22.2 billion.

qualcomm

In fact, the company is not expected to see revenue growth for some time.

QCOM Revenue (TTM) Chart

QCOM Revenue (TTM) data by YCharts

That is it for today. Good Luck

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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:#amazon #netflix #apple #qualcomm #broadcom #microsoft #sp500 #fall #rise #tesla

S&P 500 AMazon Microsoft Apple

S&P 500, Amazon, Microsoft, And Apple Getting Ready For A Fall


S&P 500, Amazon, Microsoft, And Apple Getting Ready For A Fall

Stocks continued their rebound on Friday but faded towards days end. The S&P 500 was able to get all the way to our trend line at 2,760 but failed. It also reverted below support at 2,742 and as the chart shows was unable to rise above that level despite a few attempts. It was a week ago that signs emerged a bottom had been put in place. But it is today that signs are emerging, the recent run-up may have some to give back next week, and could even see a pullback to 2,691. Not a massive decline, but given the volatility in recent weeks enough to put some investors and the media on edge.

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S&P 500 stock market

The chart of the VIX shows a rise back toward 25 could be in order over the course of next week.

vix

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Looking Tired

Amazon is showing signs of severe fatigue. The stock stopped rising right near its prior highs, and as the chart shows, the previous uptrend has turn into resistance.

amzn

While Microsoft is all looking a bit tired.

microsoft

Apple too.

apple

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Not Doomsday

Again, this is NOT a doomsday scenario, but the recent rally has gone too far too fast after a steep decline. So a natural pullback would be more than healthly.  But I will continue to explore this and bunch of other exciting topics over the long weekend.

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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 #apple #microsoft #amazon #vix

 

stock market

3 Keys To The Stock Market For The Week Of February 12

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3 Keys To The Stock Market For The Week Of February 12

The week of February 12 will continue to volatile, whether the stock market is going up or going down. The tug of war we saw on Friday, between positive and negative territory will likely continue especially on Monday. But as we wrote yesterday, signs are emerging that a bottom is in the process of being put and place, and there will be some keys to this market that could suggest the worst is over.

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A Line Drawn In The Sand?

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Vol

Volatility will obviously be the key to the market, and the VIX and many of the ETF products will be the critical focus. The chart shows how dangerous the inverse VIX ETF products are, below is the SVXY, which has been destroyed.  But more important than prices, we want to see the volume continue to fall back to normal levels.

Here in lies the problem too, and I am shocked when I see products where you can buy volatility on individual stocks, like the VXAZN, and VXAPL, basically betting that vol will rise on Amazon or Apple, these are nothing more than casino like products, betting on volatility rising. 

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Inflation and Yield Watch

The Consumer Price Index reading is coming out this week, and the street is looking for m/m reading of 0.3 percent, and a y/y rise of 2 percent.  We can see that CPI has traced OIL pretty consistently over the past.

CPI

But unfortunately, it also likely means that the inflation reading is likely to come in ahead of expectations. But I will guess that unless it comes in some crazy reading of above 3 percent, I think the market will be calmed, that inflation is not running away, which I don’t think it will do.

For now, over the short-term, if I had to guess, yields are likely done rising for a bit and a retracement back towards 2.6 percent seems in order.

Stock Watch

Watch the leadership in the stock market from stocks like Apple, Alphabet, and Microsoft. These are the leaders in the market, and when times get rocky one wants to see the leaders lead.

Micron could also be a big one to watch during the week, as the company recently pre-released revenue guidance which was higher than expectations. micron

But the market cared not, and if a bounce or even a bounce is attempted, it should be found in companies that continue to beat and raise expectations.

Facebook also has seen its shares fall sharply, and have fallen to levels not seen since the early fall, and for now, have found a meaningful bounce.

The technology ETF (XLK) could also be critical, as that ETF was grossly overbought, and has come down hard. Strength and outperformance would is a big positive.

technology

Good Luck

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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 #apple #technology #alphabet #micron #facebook #amazon #microsoft #vix #yields #volatilty