MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF NFLX

MICHAEL KRAMER OWNS SMH CALLS

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S&P 500 Big Rise

So the big questions on everyone’s mind, does this rally last? I think it does, just don’t be thrown off when we sell-off tomorrow, because we will sell-off. How do I know, well, what do Algo’s like to do most? Fill gaps. What do we have as the results of today’s big rally? A giant gap to fill. So what likely happens tomorrow?  We fill the gap.

That makes 2,690 a significant level tomorrow, and if we hold that spot, we have the start of a new uptrend. If we break below that level, then things can start getting ugly. But this is why I am optimistic; today’s rally took us above the giant downtrend the index had been in since the start of October.  That is the giant purple line in the chart below.

Semis

The semis have performed very well the last two day. I noticed over the past couple of days they started acting better. Yesterday, I even bought a small position in SMH January 95 calls. I figured why not.  So far it is working for me.  SMH closed right at a resistance level of $94. I think it works way higher to $96, perhaps even more.

The market is set up to give up much of the gains today, but if we can hold a bunch of those critical levels, I’m about to go through then the pace of things is about to change materially.

Amazon (AMZN)

Amazon failed miserably to break out today above $1,620 and that likely means we get a retest tomorrow of $1490 -1500 a critical level.

Microsoft (MSFT)

Microsoft is a setup for a retest of $102.

Netflix (NFLX)

Netflix couldn’t get through $306 today, and that sets up the retest at $285.

Micron (MU)

Micron has put in what looks like a very nice bottom around $34. A retest of $36.40 seems like a good bet.

AMD

AMD is likely looking at retracement back to $17.25.

The best thing that can happen tomorrow is to have a hard sell-off in, and a retest of the levels stated above, followed by a hard bounce higher. It will be the beginning of a bottoming process, one that we have not had until this point.

The Dollar

Moving around, the dollar index has now apparently broken out and is on its way higher, perhaps to 98 on the index, and is very likely on its way back to 100.

Oil

Oil is very close to huge break down which will send it to $61.

China

It looks like Shanghai may be bottoming out too. Look at the break of the downtrend, and the retest of the downtrend. That is a big positive.

FTSE also looks like it due for a bounce here.

Get ready; things look like they are about to heat up!

-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.

S&P 500, SP500, amazon, micron, microsoft, netflix, china, oil, stock market