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!
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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF AAPL, NFLX
Stock Rip Higher
Stocks ripped higher today rising another 85 basis points following yesterday’s rally. But there was much more than that because the S&P 500 hit a low of 2400 around 2:30 PM, and after a retest of yesterday’s break out held, the algo’s went into overdrive and took the stock market higher in nearly a straight line. That was a rise of almost 3.7% off the lows in the last 90 minutes of trading, insane!
You can see in the chart the exact moment the algo’s went from bear to bull, and the sharp rise that followed. I noted yesterday that 2,500 is the next resistance area. But I continue to think we rise further on to 2,630, taking us the mid-December levels.
You can see the surge in volume, and buyers come racing into the market by days end in the S&P 500 ETF SPY
Are We Out Of The Woods?
Can we be sure that the stock market hit bottom on Christmas Eve and yesterday was the big turn around? We can never be sure; that is why we need to take this step by step. Most important is to watch how the market acts at each major level of resistance.
Something else to remember, in my post over the weekend we talked about $60 billion in pension rebalancing for year-end: That is playing a role in this: here is some perspective: QE2 was $75 billion per Month! Not per week!
Are these positive signs suggestings that perhaps the worst is behind us? Yes. Absolutely, but it doesn’t mean we are entirely out of the woods just yet.
The housing sector index broke out rising over technical resistance at $240.50. I think this will also help give the broader index a boost. It also broke a big downtrend.
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Material stocks also broke out with the XLB rising above resistance at $50.25. Next level of resistance is around $52.
Apple finished the day just slightly lower, but still a big come back. I don’t see why this stock can’t continue to work higher to $164.
Netflix is approaching a huge pivot point at $260, where a downtrend has been in place since the beginning of October. This would be a big win for the stock, and I think it could result in a rise back to $300. Additionally, Netflix Subscriber Trends Appear Bullish
Amazon’s stock could be on the rise to around $1,550 where its next level of resistance awaits.
Micron is starting to look as if it is bottoming out. Perhaps all the bad news is finally behind the stock. $32.50 is resistance, and if it can clear that level it has room to around $34.
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.
S&P 500, stock market, apple, netlfix, housing, micron, amazon, materials