The Tides Are Turning And That Means Stocks Are About To Rise

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

MICHAEL KRAMER OWNS SMH CALLS

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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

Michael Kramer publishes independent macro and options research read across 10+ platforms and by institutional desks. For research syndication, licensing, or consulting inquiries, visit michaeljkramer.com.

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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.

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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.