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Chip stocks continue to sink, tesla register 5,000 model 3's

Chip Stocks Continue To Sink, Tesla Registers 5,000 Model 3’s

Chip Stocks Continue To Sink, Tesla Registers 5,000 Model 3’s

Michael Kramer and the Clients of Mott Capital own shares of VZ, TSLA, NFLX, and GOOGL

The S&P 500 managed to finish the day flat, and for the most part, this 2,670 level on the S&P 500 continues to hold.

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Chip Stocks

The semi companies continue to struggle, with the SOXX down by over 1.3 percent, but some stocks were down by far more. The chart on the Soxx ETF surely doesn’t look great, and the big test for the ETF comes around $167.

chips

The relative strength index is still trending lower, and unless Intel, Qualcomm, and Texas Instruments can say something more positive, it might hard to turn the direction of this group.

 

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Verizon

Verizon reports results tomorrow, and what will be the most thing that comes from the report? Well, any commentary the companies give around the upgrade cycle of smartphones will be interesting. Remember it was Verizon that told us last quarter, that they saw an elongation of the upgrade cycle. That will give us a good sense of where we stand with the chip stocks until we find out details on next iPhone launch from Apple.


Tesla

Tesla registered over 5,100 new VIN with NHTSA, which is the highest total I can remember. This comes after the company shut production for a week. Again, we will need to see what that number the next time they register VIN’s, and just how much time has passed. That could help us get a handle on the weekly production rate.

 


Netflix

Did Netflix the gap today? Maybe, it sure was impressive where the stock stopped falling and where it stabilized.

netflix


IBM

IBM shares have struggled since its quarterly results, for apparent reason, but the stock is pretty close to having an even bigger fallout.

Ibm

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Alphabet

Finally, Alphabet reported strong results beating on both the top and bottom line. But for now, investors are not happy enough to send shares higher in the after-hours. The stock is mostly flat at that moment. I haven’t had the chance to dig through the numbers yet, but when I do will be sure to share any feedback, if I should anything worth noting.

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Chipmaker Stocks May Fall 10% Over the Short Term

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AMD’s Stock Faces 14% Swings on Uncertain Earnings

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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 #tesla #chips #stocks #model3 #netflix #verizon #ibm 

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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.

chevron

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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

 

Mott Capital’s Reading The Markets – An In-depth Global Macro Stock Market Commentary – In Video Format – See How Michael Dissects The Markets

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Join our 539 Daily Subscribers And Get This Commentary In Your E-Mail! Subscribe

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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.

© 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 sells off again as new reasons emerge

Stock Market Sells-Off Again As New Reasons To Sell Stocks Emerge

Stock Market Sells-Off Again Has New Reasons To Sell Stocks Emerge

The stock market fell again today, honestly, it doesn’t matter because the reason shifts on daily basis. Rising rates, inflation, trade wars, technology stock valuations, Amazon, politics, more trade wars, now its Apple and yields again! Ugh. Exhausting to say the least.

Mott Capital Management, Michael Kramer

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Apple

I’m not talking about Apple; I’m not, it isn’t worth the time of day. Apple gave guidance of between $60 and $62 billion; analysts have been slashing their estimates since the start of the year and are currently sitting at $61 billion because that is the mid-point and it is the most comfortable place for them to live. The markets have not worried about iPhone sales since the beginning of February, and up until yesterday,  Apple was up over 5 percent on the year. The Taiwan Semi news was not good, it should not have been enough to send Apple’s stock down 7 percent in two days.

It tells us two things, well three things; investors have a short-term memory and forgot about Apple’s iPhone weakness, as they were bidding the stock up from the lows around $150 in the middle of February. Second, they were looking for a better than expected results, or three; they were not paying attention when Broadcom said the same thing last month! Come on.

That is me not talking about Apple, too.

 

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S&P 500 – Broader Stock Market

Moving on, the S&P 500 fell by over 80 bps, today, well because of Apple dragging down the whole sector with it.  The bigger question is where is this market genuinely going? All I can tell you at this point is that each low has not been lower than the previous, and that shows us in an incredibly bizarre way; the stock market is still trend higher.


Technology

Even the XLK technology ETF, managed to hold on to support around $66 and is still firmly within its long-term channel.

technology


Bonds

Why did I mention Bonds, because the 10-year got to 2.95 percent. First people are concerned the yield curve is too flat., now those concerns shift to yields on the 10-year nearing 3 percent, blah blah blah.

Well here is the thing, the US 10-year / German 10-year spread is at a fascinating point as of today. Now, let’s see what happens next week? Do the European bond buyers rush back to US Treasuries and start purchasing Treasuries? Maybe.  It would surely not be the first time.

yield spread

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Dollar

Not only that, the dollar index has yet to breakout over 90.50.

dollar

Unforuatnately, the bond market is getting a lot of assistance from global bond buyers, taking advantage of our higher interest. That has helped to keep a lid on yields rising significantly on the long end.

To this point, the dollar has gone nowhere, and without the dollar breaking out and start rising significantly, I can’t see yields on the long-end getting much higher at this point. Perhaps they peak right around 3 percent, after all, it was one of my ten predictions. But until the dollar breaks out, and the global bond buyers step away, I think this may be the upper end of the trading range.

I have a few other things on my mind, but well save those for tomorrow or Sunday.

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 #bonds #yields #apple #dollar

 

 

 

 

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

Mott Capital’s Reading The Markets – An In-depth Global Macro Stock Market Commentary – In Video Format – See How Michael Dissects The Markets

Just $200 Per Year – Get Your Free 2 Week Trial

Recent Videos:

A Review Of Netflix, IBM And Earnings Outlook

Taking A Look The Banks, And Prepping For Earnings Season

Passive Investing May Not Work In 2018

Stock Surge, A Breakout Is Close

Trade War Worries Returns

Free Articles Written By Mike:

Why FedEx Stock Is Ready to Fly

Verizon’s Stock Breakout May Lead To 12% Gain

eBay Options Traders See 15% Stock Drop Ahead

Salesforce Options Traders Bet Stock Will Rise 11%

Why American Express Shares May Jump 14%

Why Micron’s Stock Is Running Out of Gas

Why Big Bank Stocks Are About to Crumble

Why McDonald’s Stock Turnaround May Fizzle

Square’s Stock Is Facing Steeper Declines

Netflix’s Breakout May Boost Stock to Record Highs

Join our 539 Daily Subscribers And Get This Commentary In Your E-Mail! Subscribe

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

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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 #sp500 #microsoft #alphabet $tesla $technology #apple #suppliers

 

Micron, Amazon, Halliburton, Anadarko All Have Big Breakouts

Micron, Amazon, Halliburton, Anadarko All Have Big Breakouts


Micron, Amazon, Halliburton, Anadarko All Have Big Breakouts

The S&P 500 got up to 2,713, and it stalled out at that level. It makes tomorrow price action critical, because should it rise above 2,713 it signals a strong breakout. If it should move lower tomorrow, it could serve as a double negative, with a filled gap and a reversal, while failing at resistance. I’d like to see the S&P 500 rise firmly above 2,713 tomorrow, and with some significant earnings coming up next week it could set up a positive tone.

S&P 500


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Technology

Technology names continue to trend higher, as well, and I think also it serves as a positive for the broader S&P 500.

technology

 

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Micron

Micron stock had looked pretty lousy, and at the open, the stock seemed like it was going to cave and give us that big break lower. But then shares jumped sharply higher and took off. When looking at the hourly chart you can see a reverse head and shoulder in it, and couple it with the breakout, and the narrative suddenly changed.  It was just the other day, I could make a strong case for shares retesting the April lows, and that looks completely wrong, now. $55.50 is the next level to watch with a clean rise above that level sending the stock easily on towards $58. It isn’t easy reading these chart usually, and in this crazy market, it feels downright impossible some days.

micron


Amazon

Two interesting points on Amazon today, first word the company has over 100 million prime subscribers. A considerable number and extremely impressive. The stock jumped in the after-hours on the news, but I am not sure it changes anything, for the stock.

The stock broke out today, can I say I’m surprised? No. I thought it would retest $1,440 first, but I guess the market had something else in mind. Next weeks earnings results will be a huge deal, and I think it may take a massive beat to advance shares further. But that doesn’t mean the stock can’t rise back to $1,600 in the interim.

I still think based on the current sales estimates,  shares are expensive based on historical sales multiples, but a solid beat and strong guidance would up those estimates, and likely lower the valuation. So the upcoming results are a big deal, and the guidance will be even more significant.

amazon


Roku

Second, Amazon announced it would partner with Best Buy to sell TVs. Roku’s stock fell hard on this news. Did the market finally realize that what Roku does isn’t so unique? Well, it isn’t, any TV maker can do what Roku does, and the rise in the stock yesterday due to ESPN + becoming available, as I said yesterday, was a complete joke. Roku is not the second coming of Netflix. By the way, if Netflix thought Roku was such a game changer, why did Netflix spin it off Roku? Netflix didn’t want to become a streaming media device company, and potentially have barriers to other streaming devices.

roku

Energy

These energy stocks are starting to fly, and perhaps some of the money these financials are losing is going into energy companies. As I have said, Oil looks primed to rise to $75, and it is getting close to that price, now up to nearly $69.


Halliburton

Halliburton shares have broken out rising above $50.25, and should oil keep rising a move towards $58 seems like the next stop.

halliburton


Anadarko

Anadarko broke out as well rising above $63.75, and resistance area comes around $73.

apc

That is going to be 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: #stockmarket #sp500 #energy #oil #amazon #micron #roku #halliburton #anadarko #technology #energy

stock amrekt soars netflix april 17

Netflix Jumps, While IBM Slumps, Roku For Real?


Netflix Jumps, While IBM Slumps, Roku For Real?

 

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If the stock market needed the narrative changed then Netflix did just that. The S&P 500 jumped by over 1 percent on the day. The jump helped to the fill the gap at 2,713 was filled today in the S&P 500, closing at 2,706. We got right up to that resistance level in late trading and managed to back off by the end of the day. It will not surprise me if we retest the 2,691 level again tomorrow, before moving higher again. The next significant resistance level comes at the downtrend around 2,740.

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spx


VIX

The good news is that the VIX continues to decline and is back to 15. We want to see the VIX continue to fall, and I think as strong earnings continue to roll-out and the narrative in the marketplace shifts, that will be the case.


Netflix

Netflix was a prime example of that today with shares of the stock soaring above its old high, and rising to $334 up 9.2 percent on the day. $333 will now serve as support, and we can see that held today when tested.

netflix

IBM

Interestingly IBM posted what on the surface looked like substantial numbers. But if you want to be picky, gross profit margins slipped by 60 bps, to 43.8 percent. Total expenses were up; net income was down versus last year. Even on non-GAAP basis gross profit margins were down to 43.7 percent from 44.4 percent a year ago.

When adjusting for currency IBM’s revenue was mostly flat on the year, and this strategic imperatives part of the business, that is supposed to be the big growth engine, only grow by 10 percent on the year adjusted for currency. That cloud number seems awful low? 20 percent growth? 14 percent adjusted for currency? Amazon’s AWS only grew 42 percent last quarter. How does that 20 percent sound now? I guess we will know how good or bad that number is when Alphabet, Microsoft, Amazon start reporting next week.


Amazon

I hope for Amazon’s sake cloud didn’t slow to mid-teen growth rate, if so watch out. The chart is in an interesting spot here, we never entirely made it to $1,250, but we got to about $1,360. The stock finally firmly crossed over $1,440, and now the next big test comes around $1,500, where a downtrend meets a resistance level. Breakout and jumps quickly to $1,578. Fail, and you fast fall back to $1,440. Which way do I think it goes? Well, I believe it sees $1,440 again before it sees $1,578. We’ll see.

amazon


Roku

So I want to know did Roku go up to because it launched the ESPN app on its platform, or because Point72 has a 5 percent in it; because neither was a good reason for the stock to rise by 9 percent. I’m sure if ESPN + isn’t on other platforms, it will be soon. But yet the stock was up how much? 9 percent? That is a joke right?  I never said the market made sense.

That’s it!

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Tags: #stockmarket #sp500 #netflix

 

 

 

Netflix’s Monster Beat Continues To Show Why Shares Are Still Cheap


Netflix’s Monster Beat Continues To Show Why Shares Are Still Cheap

Expectations were high for Netflix, and the company delivered in a big way, adding 7.41 million new subscribers in the quarter. Total subscribers now stand at 125 million, and the company is guiding for that number to climb to 131.20 million at the end of the second quarter. The beat was driven by international growth as we expected, with nearly 5.46 million new subscribers in the quarter, down sequential from 6.36 million, but again google trends was suggesting strong international growth, but not as strong as the last quarter.

It was US growth that was very strong, with nearly 1.96 million net adds, primarily in line with the fourth quarter. Surprising to me. The strong domestic subs were very impressive, with the growth coming despite the price hike last fall, and suggests the price is likely still too low. I think even at $19.99 a month it would not hurt the companies ability at growing revenue.

Guidance was solid too. There is nothing from what I can see from my quick look that suggests anything bad.

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145 Million Subs By Year End

The company is now on pace to eclipse 145 million by the end of 2018, based on my model.

 

 

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Jumping Afterhours

The stock is trading around $325 in the after-hours, and that clears resistance at $323, but we shall see what happens in the morning. I expect that the stock will be up tomorrow.

netflix


Can Still Rise

The stock is likely still cheap based on expectations of earnings growth of around 55 percent in 2019 and 2020, with earnings forecast in 2020 of $6.58. A PEG ratio of 1, gives the company a 55 earnings multiple and the potential to rise to around $360, based on those 2020 estimates. It sounds crazy, I know, but remember Netflix gave guidance of $3.934 billion for the second quarter, and that comes ahead of estimates of $3.893 billion. It means that revenue estimates need to come up and so do all those earnings estimates.


ARPU Second Ingredient

Additionally, the ARPU for the latest quarter rose to $9.86 per month, up from $9.31 per month in the fourth quarter. Also based on those estimates, ARPU is expected to be $10.01 for the second quarter.  ARPU is trending higher and looks to be heading towards $11.75 per month by year end too. The higher ARPU climbs, plus the addition of more subscribers has a multiplying effect on revenue.

With 145 million subscribers at $11.75 per month, the company could be looking at total revenue in 2019 starting the year around at over $20.5 billion. That is about $1 billion more than current estimates of $19.47 billion.

International Growth

International growth remains in the early innings, and I expect this part of the business will only accelerate. Additionally, one must remember that ARPU in the latest quarter for the international segment was only $8.70 per month vs. $10.70 per month for the US. So the ARPU is likely to continue to climb as well in the international segment.

S&P 500

The S&P 500 got up to 2,686, within striking distance of 2,691, which I noted yesterday as the next level of resistance. I drew in a new uptrend in the S&P 500 chart for the first time in a while, as it has become a little bit more clear now.

sp500

A rise above 2,691 puts the S&P 500 on pace to reach 2,713, filling a big gap, from at the end of March. The Vix also fell below 17, as volatility continues coming out of the market.

Back 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: #stockmarket #sp500 #netflix

 

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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Bank of America Shares Seen Rising 8% Short Term

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3 Technology Stocks Facing Steep Declines

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Citigroup Shares Poised to Plunge Further

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

banks bets blame netflix tesla amazon

Banks, Bets, Breakouts, and Blame – Freaky Friday


Banks, Bets, Breakouts, and Blame – Freaky Friday

It was another exciting day in the stock market. Nah not really,  it was mostly uneventful. Technicals continue to dominate trading, with the S&P 500 testing resistance at 2,672, and testing support at 2,647, at the end of the day, we closed at 2,656.

 

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S&P 500

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Taking A Look The Banks, And Prepping For Earnings Season

Banks

As of right now, it would seem that the financials will not be the group to lead stocks higher. JP Morgan, Citigroup, and Wells Fargo reported results and all three were down despite posting good results. It could be a combination of things at play, expectations were for better, all the good news has been baked in, or investors are concerned about slowing earnings growth. It doesn’t matter what the reason was, but what seems to be crystal clear to me at least, is that the banks will not be the group to lead this market higher.financials


Yields

I think for the most part the treasury yields on the long-end of the curve are not giving in and are refusing to rise, and again I think that is a function of the low yield environment globally. The Fed can control the short-end of the curve, but the Fed has no control over the longer-end the yield curve. As long as the free market controls the long-end of the curve, I think the yield curve may continue to flatten, and that is very bad for the banks and interest income.

The spread between German and US bond is fairly steep at over 2.3 percent, and that is likely a problem

yields

In fact, I continue to believe the 10-year is going back to 2.6 percent.

Amazon

Amazon failed to stay above 1,440. Again, bad!

amazon

Nvidia

So now, Citron is betting Jim Cramer $230k that Nvidia’s stock will be below $230 in 12 months.

All I can say to Citron is that Nvidia is a tough stock to bet against. I have never once traded a share of Nvidia long or short. But I have sure written plenty on it, and I for some time I was extremely negative on it, probably from around $100 to $200, :). Every time I thought Nvidia would crack, or revenue and earnings would slow, they didn’t. To this point, it still may be easy to bet shares of Nvidia continue to rise than to bet they shall fall. Good luck to those two, I’ll remain an onlooker.


Netflix

Netflix shares broke out today, and it managed to close above the downtrend. That is a positive, considering the stock is heading into results Monday after the close. The stock got a couple more upgrades today as well. I will put a pre-earnings look on Sunday, again.

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Tesla

Elon Musk was busy on Twitter today, first challenging the economist and claiming Tesla will be cash flow positive in third and fourth quarters, and then taking the blame for excessive automation causing problems in production.

I have no idea if Tesla will be cash flow positive or not by the third quarter. Lets first see how the first and second quarters go.

The one thing I do know is that that stock can’t get over $303.

tesla

Oil continues to rise and is getting closer to our $75 target.

oil

That’s it, see you Sunday! No commentary tomorrow, I’m taking the day off!

-Mike

 

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Recent Videos:

Taking A Look The Banks, And Prepping For Earnings Season

Passive Investing May Not Work In 2018

Stock Surge, A Breakout Is Close

Trade War Worries Returns

Free Articles Written By Mike:

Square’s Stock Is Facing Steeper Declines

Netflix’s Breakout May Boost Stock to Record Highs

Why JPMorgan’s Stock Is Losing Its Luster

Why Apple’s Stock May Have Peaked

4 Energy Stocks Set to Surge on Rising Oil

3 Biotech Stocks Analysts Have Been Too Bullish On

Bank of America Shares Seen Rising 8% Short Term

Visa’s Breakout May Boost Stock by 10%

Amazon’s Stock Faces Wild 10% Swings on Earnings

Why J&J’s Fallen Stock Is Still Too Pricey

Facebook Traders See Stock Rising 10%

3 Technology Stocks Facing Steep Declines

Why Nvidia’s Bulls May Be Way Too Bullish

Walmart Options Traders See Stock Surging 12% Short-Term

Citigroup Shares Poised to Plunge Further

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Michael Kramer and Clients of Mott capital own shares of NFLX, TSLA

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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 #tesla #nvidia #netflix #jpmorgan #banks

 

 

technology stocks

Technology Stocks Are Getting Ready To Go Higher, Plus Much More


Technology Stocks Are Getting Ready To Go Higher

There were a couple of positive developments today. First, the S&P was higher, by 83bps, and closed at 2,663. Next, the close above that pesky resistance level at 2,660 we had been watching. Today also established that 2,672 is now the next resistance area. The last two times the S&P 500 got to 2,672 it was followed by two nasty downdrafts, resulting in a fall of about 3 percent back to 2,600, each time. A rise above 2,672 would be an immensely positive sign for a continuation of the most recent rally.

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S&P 500


Technology Stocks

A new trend line was born today for the technology sector, XLK, and for the first time in a while, the technology sector has a direction other than down. $67.10 continues to be a resistance level, but should it rise above resistance to say $67.50 it gives the ETF a perfect shot of filling the gap at $69.25.

technology

Nvidia

Nvidia looks to be heading back towards $245.

nvda

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Consumer Stocks

Discretionaries are continuing to struggle after hitting resistance around $102.

consumer

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Amazon

For right now, Amazon maybe the only stock capable of lifting the entire group. First, because it has a nearly 20 percent weighting in the ETF, second because today it closed above $1,440, a mild positive. There are still plenty of hurdles for Amazon to overcome; the most obvious is that the stock needs to stay $1,440.

amazon


Netflix

Netflix appears to be setting up for a breakout towards $322. The company reports results on Monday after the close; I will have a closer look at it over the weekend.

nflx


BANKS

Tomorrow will be a big day for the banks, with JP Morgan, Wells Fargo, and Citigroup all reporting before the open.

JP Morgan is slightly breaking out

jp morgan

But the setup in Citi doesn’t look nearly as strong.

citigroup

If the banks want to be a leading sector in the stock market, tomorrow will be the day they can prove they are capable are leading or not.

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Acadia

Why is Acadia not back to $22 already, after the BS story from Monday? I was shocked to see the FDA made a statement on it.

The stocks downdraft proves once again you can’t believe everything you read, and that understanding what you are invested is so extremely important.

At this point, I’d be happy if we filled the first gap at $22, but the one at $30 would be a whole lot better.

acad


Tesla

You know, I was gonna end after Acadia, but then I saw this stupid analyst comment that Tesla is going to fall $84, because, get this, “increasing competition.” Are there no cars sold today? Is Tesla the only automaker in the whole world? Of course not.

I’m sorry, but Tesla has competition today and has had competition since the moment Elon Musk thought about making a car. A car is a car, and the thought that because Audi or Mercedes is going to start making an electric car, people are suddenly going to stop buying Tesla’s seems crazy to me. If someone wants to buy a Mercedes, they can get one right now. I do not think the world has become entrenched enough in the thought process of buying only green cars, that everyone is now running to Tesla. Besides, just how green are electric cars? The energy to power the battery needs to come from somewhere.  They are undoubtedly better than gas but come on; you still need the energy.

By the way, once again, the proof is the Chevy Bolt, how many cars did Chevy sell so far in 2018? A crappy 4,375.  How many in 2017 total? 23,297. Btw, they cost nearly 3 times less than a Model S, so why not 3 times the sales if the electric part matter so much?

People are buying a brand; they aren’t buying it because of the engine or motor type.

Good luck tomorrow

-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 #sp500 #amazon #tesla #acadia #nvidia #netflix #jpmorgan #banks

stock market transition

The Stock Market May Be In The Middle Of A Major Transition


The Stock Market May Be In The Middle Of A Major Transition

It feels as though the dynamics of the stock market may be changing. Although I can’t say it for sure yet, I feel like the more companies I research and watch, the more reasons I find for stocks to move lower, rather than to rise. The charts are also not looking solid in many cases, and that would suggest to me the market may be going through a transition currently. I will continue to think on this and report back as I find more evidence to support this theory. The market could be transitioning more to a stock specific market and less of a sector related market.

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S&P 500

The S&P 500 continues to fail around 2,660, and I’m not sure what that means at this point, other than it being a negative sign.

spx

 

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Technology

The technology XLK also failed to continue its rise from yesterday, falling below $66.

xlk


Facebook

But again, Facebook continues to rise closing above $166. The stock may continue to work higher from here.

facebook

Amazon

But Amazon continues to struggle, at $1,440. I drew in new downtrend today as well. For a stock that is set up to report results in the next couple of weeks, the stock is not acting like results will be strong. It seems like the direction could change with a just a mere tweet though. But the longer it stays below $1440, the more the odds of decline further are.

amazon


Netflix

Netflix got a bunch of price target increases ahead of Monday’s results. Cowen went to $350 from $275, Goldman going to $360 from $315, Raymond James going to $330 from $290. Shares were up most of the day but gave back some going into the end of the day.

The longer-term pattern in the stock chart continues to be bullish, and a breakout could come after results, with a rise back into the $330.  I wrote up my outlook for the stock over the weekend.

netflix

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Sectors

The Consumer stocks failed at resistance today, and as long Amazon is stock is struggling the ETF will go nowhere. Amazon has an enormous 20 percent weighting in the ETF, with Home Depot being the second largest at 7 percent!.

Right now, it feels like there a bunch of mixed signals taking place in the market. Biotech stocks continue to struggle. Financials have a big day coming Friday, while Materials don’t look particularly strong either.

But the good news is that the 10-year continues to trend lower, and is currently at 2.79 percent, while the dollar remains relatively unchanged.


Stock Specific

Earnings will need to be better than expected to get the whole market moving higher. Otherwise, it is starting to look a market that is going to be stock specific. We’ll see how things come together over the next week or so.

Good Luck!

Mike

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Tags: #stockmarket #sp500 #amazon #facebook #technology 

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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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 #bakerbrothers #acadia #biotech #alexion #technology #amazon #incyte #facebook  

stock market acadia

Stock Market Finds New Reasons To Drop, Plus A Quick Look At Acadia


Stock Market Finds New Reasons To Drop, Plus A Quick Look At Acadia

Stock’s surged in the early going before giving back the majority of the gains. I had warned in the midday commentary to use caution, which we just saw this same story play out last week. What’s the cause, not sure. Some could point to the FBI raid of President Trump’s attorney’s office Michael Cohen, or word the Federal debt is growing larger. To be truthful, I’m not sure it even matters, because every day of the week there is a new concern and worry in the marketplace, and it continues to show us how fragile the market is. Tomorrow there will be another excuse for a sell-off.

S&P 500

The making of the turnaround was in works around lunchtime, with the S&P 500 stalling out around 2,650.

spx

 

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Micron

Micron failed miserably at resistance around $49.75.

micron

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Nvidia

Nvidia failed at its downtrend.

nvda

Facebook

Facebook continues to fail around $161.50

facebook

Amazon

Amazon failed again at $1440.

amazon

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Microsoft

Microsoft failed at $93.

microsoft


JP Morgan

And last but not least, JP Morgan failed at resistance. I don’t want you to think I only write up technology stocks.

jpm

Boeing

Oh, and Boeing is close to a major breakdown.

ba


Acadia

Did you see the downgrade CNN put on Acadia, yeah CNN?

Now, first I am no Dr., I have no medical experience what so ever. So this is merely my opinion based on what I have read, studied and researched on my own. So you are welcome to agree or disagree with my opinion.

If you are an investor in Acadia, as I am, you realized reasonably quickly the database the article was referring to is FAERS data.  If you also thought you were having deja-vu when reading the article as well, you weren’t because this news, is nothing new. In fact, on Sept. 27, 2017, when the database first came out, the same thing happened! In fact, Acadia, Sarepta, and Ionis all trade lower, here is the article. Read the article.

I reread the transcript from the FDA panel meeting in March of 2016, and my impression is no different than it was over two years ago. The patient population is very sick and Nuplazid although not a perfect drug does offer hope to those suffering from hallucinations and delusion. The latest data from the ADP study showed that four individuals died on Placebo and 4 on Nuplazid, while 10 out of 91 on placebo had an SEA (10.99%), to Nuplazid 15 out of 90 (16.67%).

Take my opinion with a grain of salt, but those are my thoughts.

-Mike

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stock market monday april 9

6 Key Indicators To Watch In The Stock Market For Monday, April 9


6 Key Indicators To Watch In The Stock Market For Monday, April 9

Trading in the stock market on Monday, April 9 will be extremely important, and I’m going to be watching a few things before the stock market even opens Monday morning.

 

 

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China

First I’m watching how Asia trades, most notably Shanghai. The market in China will reopen again on Monday for the first time since April 4, and it should be interesting to see if the markets in China respond the same way our markets have reacted to the increasing trade tensions.

Dollar

I’m also going to be watching the yen and euro, and see which way the dollar goes. One would think the dollar would weaken if the FX market is foretelling of US economic slowdown or a potential trade war.. To this point, we have not seen anything new develop in the dollar trade.

dollar


Mystery Buyer

In the morning, starting around 6 am, I’m going to be watching the S&P 500 futures, but not for the price, but for the mystery buyer that likes to come and buy the S&P futures in a big way around 5 to 7 am. These volume spikes have predicted the lows in the stock well in the past; my hunch is that this trader returns if the price is right.

S&P futures


VIX

The VIX will also be important to watch, 25.5 has been a clear top, and a rise above 25.5 is a bad indicator for the direction of the S&P 500.

vix


Market Leaders

The banks report results this week, and investors will be looking to the banks for a sense of direction going into those results.

Apple, Alphabet, Amazon, Microsoft, and Facebook are the most important stocks in the S&P 500, and let’s face where they go is going to primarily determine where the S&P 500 and the Nasdaq 100 go. On Friday and Saturday’s write-up, I gave the levels to watch.

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S&P 500

Finally, 2,550 on the S&P 500 will be very important, a retest in the early morning would be ideal, followed by a rebound and buying frenzy in the late afternoon would give more confidence that we aren’t heading lower. But should 2,550 break a retest of the February lows is likely, and a break below the February lows may open the floodgates.

Good Luck this week, we are all going to need.

-Mike

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chip stocks micron predictions

Chip Stocks Perform The Best, But Not Micron – Predictions For 2Q


Chip Stocks Perform The Best, But Not Micron – Predictions For 2Q

The semiconductor sector, despite the high levels of volatility,  still managed to rise by 6 percent in the first quarter, while consumer staples fell by nearly 7.5 percent. The S&P 500 managed to slip just over 1 percent, not bad given how far it had dropped at one point.

 

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XLK Chart

XLK data by YCharts

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Predictions for the Second Quarter

I don’t see much changing in the second quarter, I think the markets are going to continue to be volatile, granted, I don’t think to the same degree as in the first quarter, but not like 2017. The earnings outlook remains strong, with Dow Jones S&P Indices, looking for earnings of $146.92 in 2018, and $161.51 in 2019. That is growth of 34 percent in 2018, and 10 percent in 2019. It leaves the S&P 500 trading at about 18 times 2018 earnings and 16.3 times 2019 earnings. Certainly not alarming multiples.

I’m going to live on the edge and predict the S&P 500 finishes the second quarter around 2,900. It is a bold call, and given the recent craziness, anything seems possible.

S&_P 500


Semiconductors

I think the semiconductor stocks are going to be what lead the market higher, helping to pull the technology sector up with it.

semicondutor

In fact, the recent 3-month average North American billing data, provided by Semi.org, suggests the business is still strong. There is a strong correlation between billings and the PHLX Semi. Index.

Additionally, the growth rates been trending nicely in recent years and have been avoiding the boom and bust cycle we have seen the past, and I think that lead to the sector seeing multiple expansion over time.


Micron

I’m not sure Micron will be one of the stocks that lead the group higher, though. The stock has been extremely volatile in recent weeks, with a huge run-up in price. But also analysts are looking for earnings to fall in the coming years, from $10.81 in to 2018, to $9.84 in 2019, and $8.40 in 2020. Meanwhile, they are forecasting no revenue growth, kind of strange, espically since the stock has been getting all these upgrades and price target increases lately.

MU EPS Estimates for 2 Fiscal Years Ahead Chart

MU EPS Estimates for 2 Fiscal Years Ahead data by YCharts

I know, but the stock only trades at 5.3 times 2019 earnings estimates. I know. But stocks trade at cheap earnings multiples for a reason, and usually, it’s becuase the market doesn’t expect the good times to last. In the case of Micron, based on the revenue and earnings estimates, the market doesn’t believe the good margins can last.

I’m just telling you what worries me about Micron, like it or not.

More predictions over the weekend.

-Mike

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Tags: #sp500 #tech #technology #semiconductors #micron #predictions #stockmarket

 

The Stock Market Will Continue To Rise As Red Flag’s Blow Away


The Stock Market Will Continue To Rise As Red Flag’s Blow Away

Just like that the stock market recouped nearly half its loses from last week, with the S&P 500 surging by almost 2.7 percent. Maybe it is me, but did anything materially change from Friday? Did all those Red Flag’s blow away? Did the trade war that everyone feared suddenly evaporate? Did China agree to cave and give us all of our demands? Did the surging Libor mystery finally get solved? Did the Fed stop paring its balance sheet? Did Elon Musk create a time machine that allowed us to bypass 1987, and go straight to 1988? I want to know what change, because from the way I see it, nothing materially changed since Thursday or Friday.

 

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Buying More Semis?

The Chinese have agreed to buy more semiconductors from the US; I’m curious to know just how much more they are planning to buy because I can’t seem to figure that part out. Is it $1 more or the $14 billion that Intel’s market cap went up today? How about they first approve Qualcomm buying NXPI, without Qualcomm having to give more concessions?

So at the end of the day nothing changed, except perception.

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Trade War Is BS

It is still my belief the Trade War theory was complete BS. If it was on trade war fears why did the banks get slammed the most? Facebook had plenty of reasons to go lower as well. Then my favorite is the dollar! The dollar went down last week on heightening trade war concerns, but yet trade tensions easied over the weekend, but guess what, the dollar still went down today. Undoubtedly the dollar should have surged on the relief of the trade war tensions. You see a surge higher? I don’t.

dollar


Financials Fall

Here is a five-day chart of the S&P 500, financials, and technology starting on March 20. Financials had a more prominent jump following the Fed results, and by the way, had the more significant decline. Notice which group is still underperforming as of today’s massive rise? The financials. 

Here is another chart, with the materials and industrials, right in the middle of the trade war tensions, which group performed worse? The financials. Which group is still trailing? The financials.

XLF Price Chart

XLF Price data by YCharts

So why did the banks go down so much? Are they really in the middle of the trade war tensions? Usually, banks go up and down based on interest rates, and spreads, right?


Not As Many Hikes

I still believe that the trade war narrative has been overplayed. The real culprit here are rates, and you can see it in the dot plot that the Fed likes to put out. It is also the reason why the dollar has continued to fall, and the reason why 2-year yields went down after the FOMC. The majority of the plots on the dot plot chart fall between 2 and 2.25 percent. The effective Fed funds rate today for all intensive purposes is 1.7 percent, 2 more hikes equal 50 bps, which takes the rate to 2.2 percent! It means that we likely don’t get four rate hikes in 2018, just three.

When did we start talking about four rates? After the January jobs report, with the hot wage growth, that sparked inflation fears. What was one of the hottest groups in the stock market from February 8 through March 20?  Technology, which surged by nearly 10 percent, and the banks which were up almost 6 percent, and what was the worse performing group during that time, well the utilities. Why did the utitlites underperform? Becuase rising rates aren’t good for high yield equities.

XLF Chart

XLF data by YCharts

The Dollar

What about the dollar, you know it was up from February 2 through March 20 by 1.4 percent, and down 1.5 percent since March 20. Higher inflation means higher rates, suggests a strong dollar, and vice versa.

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Why Do Banks Matter

So why did the market go down last week? Because investors realized that they weren’t going to get four rates hikes in 2018, and that sparked the sell-off in the banks, and that is the reason they are still the worst performing sector over the past five days. While JP Morgan, Berkshire, Citigroup, Bank of America, and Well Fargo, have a weighting of 6.4 percent in the SPY ETF.

Or Facebook?

Why did the market go down last week? Because Facebook had some really crappy news and it took the hottest sector down with it.  Why does it matter if Facebook is down? Because it has a 6.5 percent weighting in the XLK, and 5 percent weight in the QQQ’s and 1.73 percent weight in the SPY. Is that reason enough?

How Will I Know If I’m Right?

So how will I know if I’m right, well banks should continue to underperform along with Facebook, while the rest of the market continues to recover.

Night!

-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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