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The Stock Market Plunges Yet Again, How Much More Pain Can We Endure

The Stock Market Plunges Again, How Much More Pain Can We Endure

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.

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MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN NFLX, GOOGL

Another Hard Day For Stocks

Sorry, folks. Not much positive here today. Feeling pretty horrible myself, I hate to be wrong, and so badly.

The S&P 500 is trading at 14.6 times 2019 earnings estimates and 16.1 times 2018 earnings estimates. Things certainly keep getting cheaper. The S&P 500 fell yet again, and this time it was to the February lows around 2535. Nothing was really sparred today, everything was taken down, everything. The only that was up was Gold and the VIX basically.  The big test will be what happens when the VIX reaches 26.

VIX

Twenty-six on the VIX has been a critical level of technical resistance. If the VIX manages to pass through 26, it likely means it’s going higher to around 30 or more. That means equity prices are falling even further.

vix

In some regards, this feels a bit like a game with the VIX and equity prices. Sell equity’s, buy the VIX then make the trade in reverse, and repeat. Look at how nicely the VIX has stayed in the range between 15 and 26. I don’t know, call it a conspiracy theories.

Russell 2000 (RUT)

Anyway, the Russell fell below support at 1,394 and is now 20% off its high. The support level did not hold, and it would seem it could drop to 1,344.  You can see how critical this next level of support is and it would seem that is now where it is heading.

russell

NASDAQ (QQQ)

The NASDAQ is sitting on a key support level around 6,750 and the NASDAQ could be on its way even lower to 6,460.

nasdaq

Amazon (AMZN)

Amazon didn’t make a new low but the chart is looking bad. Perhaps $1450 is on the table. amazon

Alphabet (GOOGL)

Alphabet continues to hold above $1000.

googl

Netflix (NFLX)

Netflix continues to hold its long-term trend.

nflx

Chips

For the most part, the semis still continue to hold their October lows.

smh

Interestingly the stocks that fell pretty hard today where the defensive names. I’m a bit surprised by that action. There is now just about nowhere left to hide.

Walgreen (WBA)

Walgreen’s has risen sharply during this stock market sell-off, but not today.

walgreens

Procter and Gamble (PG)

Procter and Gamble fell hard today as well, by more than 3%. Should the stock fall below support at $92.75, it could fall to around $86.

pg

Clorox (CLX)

Clorox has performed incredibly well too, and that one may now be on its way to $150. clx

Healthcare (XLV)

Healthcare looks weak too as it approaches support around $86. A break below $86 could drop it to around $82.50

Healthcare

Gold

Would seem that even the safe havens are now under assault.  I suppose there is always Gold. That looks as if it may rise to around $1,280.

goldAnyway, that’s it for today. I have nothing left to say. Going back to the drawing board.

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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