Home » Worlds May Collide As A Downtrend and Resistance Met Mr. Market

Worlds May Collide As A Downtrend and Resistance Met Mr. Market
The S&P 500 rose today and it sets up a possible showdown for a downtrend, a resistance level, and Mr. Market. Who wins?

Worlds May Collide As A Downtrend and Resistance Met Mr. Market

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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October 9 – Stock mentions: SPY, CSCO, TSLA, SHOP, ROKU, JPM

Michael Kramer and the clients of Mott Capital own CSCO and TSLA

If you missed my presentation this afternoon you can watch the replay here.

MACRO

Stocks rose on October 9. Today was in hopes of a trade deal. Yesterday those hopes were dimming; today, they were brightening — whatever, who cares.

Let’s look at the chart; it is bound to be more informative.

S&P 500 (SPY)

The general direction in the chart is higher, and there is still that gap left to fill up to 2940. My gut says the S&P 500 rises to that level of resistance. That is also where the downtrend lives. To say that 2940 is a crucial region of resistance is an understatement.

S&P 500, spx

The number of stock above their 50-day moving average is still below 40% and hardly moved today, remaining at the lower end of the range. S&p moving avrage

Anyway, I don’t think anything major changed today in terms. It was a step in the right direction, but it does point to tomorrow potentially being a make or break moment in terms of the course the market goes next.

The downtrend, the gap, and resistance all converge tomorrow.

The Fed

I am beginning to think that the Fed may have as many as three rate cuts ahead of it. I talked about why I thought that was the case in a video today. Here’s Why The Fed May Cut Rates 3 More Times

STOCKS

Roku (ROKU)

Roku had a strong day after breaking the downtrend. It surged by 9% to finish around $118. It didn’t get to $122, but it is likely heading there. I did note yesterday on my mid-day update that I though Roku could be heading higher to $122. Which was a change in my view from the morning write-up. Stocks Fill The Lower Gap

roku roku

Cisco (CSCO)

Cisco was up some today, and I wrote a premium article talking about why I thought the stock could rise to around $49.30 in the weeks ahead.  Betting Cisco RisesI give you the first two weeks to try it for FREE, if you hate it you can cancel. 

cisco, csco

Tesla (TSLA)

Tesla appears to be forming a symmetrical triangle, which is usually a continuation pattern. In this case, it would indicate the stock is likely to rise, perhaps back to $261.

tesla, tsla

Shopify (SHOP)

I’m not sure what is happening here with SHOP, but it isn’t looking good. The stock is now trading sideways through the mini-uptrend that formed. It is also once again failing at the $315 region. Not good. It may need to fall back to $285 again before it goes anywhere else.

shop

JPMorgan (JPM)

JPMorgan, like many of the bank stocks, finds itself at an interesting point in time. The uptrend is clear, The question where does it go next? At this point, my instincts say it goes lower to $106.

JPM

Have a good one.

-Mike

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.