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!
Subscribe to the Monster Stock Market Commentary and join the 2,529 subscribers getting it for FREE every day!
MARCH 4, 2020
STOCKS – AAPL, ACAD, SPLK, V, SWKS
MACRO – SPY, VIX
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SWKS, AAPL, ACAD, SPLK, V
Stocks rose by over 4.2% to finish the day at 3,130. The rally was impressive, with the market shaking off pretty much every coronavirus headline today as if they never even crossed the tape. So, either the virus risks have been priced into the market, or the virus was nearly the narrative used to explain the sell-off.
Overall, the market seemed very strong today, with a new uptrend forming, creating a series of rising triangles throughout the day, taking out resistance level after resistance level. I noted the first level during the midday update, and the rest was history. Premium content- Stocks Rally, Setting Up What Could Be A Strong Finish Today
S&P 500 (SPY)
Anyway, is the coast clear? It feels like we are getting closer. You can see on the chart; the S&P 500 cleared a downtrend that formed from the start of the sell-off, and how we have now broken it. If somehow we manage to rally beyond 3,185, it would suggest there is a good chance a fill up to 3,330.
I know you think I’m crazy, but did you see all the coronavirus headlines the market blew through today, from LA to NY. It was if they didn’t exist. Clearly, the “panic” the market was in last week, is not the case, most certainly not today.
The VIX is sitting right on support at 30, and a break of support at 30, sends the VIX down to 26, and well, would suggest fear levels are retreating.
Skyworks preannounced today, and as I noted on the morning call, it was in pretty much in line with Qorvo, with a roughly 5% reduction in revenue guidance. The company pointed out in the press release; the miss which was due to the demand environment, which due to the interruption in the supply chain, basically because of Apple. How a roughly $40 million shortfall in revenue for one quarter turns into a $3 billion drop in market cap is beyond me. Anyway, the stock appears to have support around $100, and I think it starts working back to around $112. Premium content – Morning Commentary – Turning To South Korea For Guidance
I’m not the only one crazy enough to think the market is heading higher. Someone was making a reasonably sizeable bet that Apple’s stock goes back to its all-time highs. Premium content – Apple’s Stock May Be Heading Back To Its All-Time Highs
Visa appears to be recovering, and someone is betting that shares rise back to $211 by June. The stock has its next level of resistnace at around $200. Here is a link to the free story. Visa’s Coronavirus Sell-Off May Be Overblown
Acadia finally made it through resistance around $43.30, and well, the next stop appears it may be around $46.
Splunk reported results after the close, and the stock initially plunged because the company’s revenue guidance for the first quarter and full-year came in well below estimates. But then came the conference call, and the company explain it was due to the transition to the cloud, and the accounting of the revenue. Then they gave their longer-term guidance, and well, the stock did a significant u-turn. I never heard so many happy people on a call, even the analysts sounded thrilled, and I think $161 is likely the next stop.
Anyway, I may take the mornings off the rest of the week. I’m pretty fried; I will see how I feel. Maybe an abbreviated version.
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 results.