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 GOOGL, AAPL
S&P 500 (SPX)
The S&P 500 cleared resistance at 2,752 today and you couldn’t ask for a better setup going out on a Friday afternoon ahead of the G20 meeting between US and China. It could result in a push on toward 2,820 by the middle of next week. At that point we will find if we rally into the year-end or fade. 2,820 will be the line in the sand.
The Russell 2000 is also trying to poke through resistance at 1,533.
Facebook cracked $140, and that may set the stage for that move to $148.
Alphabet continues its push towards $1135
Subscriber Mail Bag
It is Friday, and that means its time for the subscriber mailbag. I’m going to do my best to answer as many questions as possible. But if I should miss your question feel free to resubmit for next week.
1) The first question was for me to look at the charts of AVGO, FIVE, and AMGN.
Broadcom has a bullish setup, and I think if it can clear that long-term downtrend around $240, you may see a rise to about $251. That is the next major level of resistance. Get through $251, and you are off to $275.
Amgen looks like it ready to make a new all-time high. A rise above $210 could push it to $225.
Five Below, the chart looks lousy. $96 is my guess.
2) What does a well-diversified portfolio look like in the time of a trade war and rising rates? Well, we just went through that period, and you can see that nothing was safe. So I think it should be based on your time frame and how much pain you can stomach. I just really try to keep it simple and not get emotional.
3) Nvidia – I do not like this stock presently. Can the shares rise to $170 sure. Is worth paying a multiple that is double the sector? No. What is the catalyst for this stock to go higher? For now, I don’t see one.
4) What impact do Algo’s and ETF play in the recent sell-off on stocks like Amazon and Apple? The effects are great in my opinion. Remember for the most part algo’s are pretty dumb. VWAP and participate algo’s go with the flow just trying to keep pace with volume. ETF’s are merely a basket of stocks so when an ETF falls it puts pressure on the shares in the ETF basket. When the stocks fall, the ETF’s NAV falls, and then the ETF needs to sell the holdings in the basket putting even more pressure on the stock. Then you get a negative feedback loop. Throw in the dumb algo’s, and you get the steep declines we have saw, in my opinion.
5) What are some predictions for 2019 in the S&P 500? You will have to wait. I come out with my list of 10 predictions ever year throughout December.
6) Next was a question on Intuitive Surgical? I don’t know much about this stock, so it not fair for me to comment. I will take a look a get back to you next week, sorry.
7) How do I have so much time for blogging? I don’t know. I enjoy it, so I make the time I guess.
8) Next question was on the Santa Claus rally. Lets see what happens with the G20 first.
By the way, I only answer one question per week from the same person.
Have a great weekend!.
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