MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL, TSLA

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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.

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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.

NASDAQ

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.

Russell 2000

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 (AAPL)

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 (AMZN)

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 (TSLA)

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.

-Mike

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