MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN AAPL

Good Morning Today is December 17

• S&P 500 futures are pointing to a lower opening of 14.5 points as of 7:30 AM
• The US 10-year rate is at 2.82%
• Dollar Index is at 96.74
• WTI Crude Oil is $48.39
• Critical events for today: – FOMC meeting starts

Recap of International Trading:

• Japan was  -1.82%%
• Hong Kong Hang Seng Index -1.05%
• China Shanghai Comp. -0.82%
• UK FTSE -0.40%
• Dax +0.43%

FED Rate Hike Watch:

According to the CME, there is now a 71% chance of a rate hike in December, that is up from 78% on Monday

Currently, the market is pricing in a 38% chance there is no rate hike in 2019 and a 26% chance of just one rate hike, and 17% of a rate CUT.

CME Group

Will The Rally Hold?

S&P 500 futures are pointing a higher open after yesterday’s steep sell-off. The question on everyone mind, can it hold? Current history would say that Gap gets filled, and from there it is anyone’s guess.  Yesterday’s gap lower was quickly filled, only for the downtrend to continue. Until proven otherwise, one must be on guard.

Russell 2000 (RUT)

The Russell is one index that looks like it may still have more downside risk, and may drop to 1,344. It is only about 2.5% lower than the index’s current level — approximately one day worth of work in this horrible stock market.

Put-To-Call Ratio

The put to call ratio hit 1.37% yesterday, and as the chart below shows, is entering territory that it doesn’t get to very often.

VIX Index

The VIX is nearing a significant level at 26. That has been a resistance level. But should it rise above 26, the VIX may go on to increase to around 30. That would likely mean that equity prices go lower. Buy Vol, sell equities.

Facebook (FB)

As noted last night, the FANG stocks continue to hold their previous lows, which again is a positive. Even Facebook continues to hold support around $140, and more importantly, continues to trend higher.

Broadcom (AVGO)

Broadcom is one chip stock that acted very well in this market and continues to hold support at $252.

Apple/Qualcomm (AAPL, QCOM)

Apple and Qualcomm continue to go back forth over iPhone sales in China. In the meantime, Apple’s stock is fighting for survival at support around $164.

Oracle (ORCL)

Oracle is rising after reporting results; the bad news is that the stock is increaseing right into technical resistance at $48.60.

Oil

Oil finally broke support at $49.50, and that means it could be on its way to $42. The decline may pose as a problem because earnings for the sector were expected to grow 17% next year according to Dow Jones S&P. Those estimates likely have much further to fall.  That is one problem for S&P 500 earnings next year. 

Exxon Mobil (XOM)

It also likely means that Exxon Mobil will continue to fall. Should it drop below $72, it could fall to around $65.

Chevron (CVX)

If Chevron falls below $111.80, it could be on its way to $103.60.

Yields

10-Year US Treasury rate is nearing support at 2.81%, and should it fall below support yields could be on their way to 2.62%.

Gold

Gold could see resistance around $1280

GOOD LUCK!  WE ARE ALL GOING TO NEED IT!

-Mike

Photo Credit Via Flickr

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.

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