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The Bull Is Back, Stocks Are About To Break Out! – Daily Rundown
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF nFLX
I know that some people thought earnings wouldn’t save the market, that inflation was going to run rampant, or that yields were going straight to 4 percent on the 10-year. That all these factors were surely going to tank the market, but at the end of the day, the underlying fundamentals do matter and understanding the fundamentals matter even more. Right now, the underlying fundamentals support higher equity prices and lower yields.
In fact, the Fed tipped its hand today, when it said: “a temporary period of inflation modestly above 2 percent would be consistent with the Committee’s symmetric inflation objective.”
That was the big take away from the Fed minutes, and what does that mean? Well, it means that the Fed likely realizes what I have been telling you for months now, once the benefits of rising oil fade, the Fed’s inflation problem will fade too. The Fed is merely buying itself time, to see that indeed is what happens. What was the market reaction?
The dollar reversed right at resistance around 94 on the dollar index.
10-year yields fell below 3 percent.
The S&P rose higher, recovering all the day’s losses, plus yesterdays. We likely get a retest of resistance around 2,742, and a breakout tomorrow in my opinion.
If Netflix is any indication of the future, then tomorrow the S&P 500 rises above resistance. Because Netflix broke out in a big way today. It is a breakout of epic proportions. Just look at the straight line following the breakout!
Not only that the breakout comes on better than average volume, with the RSI confirming the breakout, with a breakout of its own.
Make no mistake I think this is a very big breakout, not just for Netflix but the market. Netflix has been the leader all year long, and the soldiers will follow the generals, and there is no doubting Netflix’s leadership this year.
It wasn’t just Netflix that broke out today; the technology sector broke out too.
No, Amazon still has not broken out, but when it does, it will be just further confirmation, of the bullishness gripping stocks.
You know where I stand and what I think.
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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: #netflix #amazon #sp500 #fed #yields #dollar