This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.
Otherwise, enjoy the column!
© 2019 Mott Capital Management, LLC. Use, publication or reproduction in any media prohibited without the permission of the copyright holder.
Join our 1,491 Daily Subscribers And Get This FREE Commentary In Your E-Mail!
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL, TSLA
Well, just as we start getting comfortable the earth shakes, and stocks fall. What was the main reason for today’s sell-off? Maybe it was the sell-off in Hong Kong; perhaps it was the PPI number? Who knows. Perhaps it was just the Algo’s refilling technical gaps left open from Wednesday’s big move higher. It is impossible to know these things. The big question is if there was enough damage done today to reverse the recent rise we have seen in the market since the week of October 29. I do not think the damage was severe enough to be a rally killer.
Premium Content: More Cautionary Warning Signs Emerge for 2019
S&P 500 (SPX, SP500)
If we go back to Tuesday, I had noted that level of resistance to watch for at 2,820, and that is nearly where the S&P 500 turned lower yesterday. My only mistake was thinking that support at 2,790 was enough to hold. But at the end of the day the S&P 500 closed at 2,781, so today’s decline despite being painful was a not a disaster. The big test shall come Monday, that is when stocks will get the chance to recover and rise above 2,790.
The NASDAQ interestingly fell to support at 7,348 but snapped back nicely until it failed at resistance at 7,442. Again, not a disaster, but it will be essential for the index to rise above 7,442 on Monday.
The Russell 2000 also failed at it resistance level at nearly 1,590 and fell nearly to support at 1533. Again, the sell-off although annoying and uncomfortable was not a disaster.
If you want to spin today’s sell-off in a positive light, we can take a look at two key stocks and see that despite the pullback, they well off their lows and trending higher.
Apple failed at resistance at $209, and I have recently been looking for a rise to $217. The trend for Apple is still higher, and I still believe that is the direction of the stock.
Amazon is also still trending higher despite failing to rise above its downtrend around $1,760. Again, at this point, I do not see any change in the stocks and expect it at the moment to continue its rise.
Tesla continues to piece together some nice trading days. There was some notable call activity today for expiration in December at the $380 strike price. But for now the stock first needs to get over $362.
That is going to be for a rainy Friday afternoon. More this weekend.
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.