8 Monster Stock Market Predictions – The Week Of January 11

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Stocks appear to have broken out from their previous trading range with Friday’s surge higher. The move higher was even more impressive because the market could stage an end of day rally to close at a high.

S&P 500 

The chart for the S&P 500 (SPY) seems to suggest an increase to around 3950 is likely coming over the very short-term.

10-Year

Just how far equities rise may be determined by the bond market and how far yields rise. Or it may be the other way around; how far yields rise will be determined by how far equities allow them to. The 10-year (TLT) broke out last week and is likely to climb even higher from here, with the potential to move to 1.4%.

This week saw a big drop in the TLT due to yields on the long-end of the curve rising. Based on this chart, the TLT could still be heading lower, perhaps to $148.75.

Tesla

Tesla (TSLA) has rocketed higher, and the stock is getting to extremely overbought levels. Meanwhile, the implied volatility level has surged to around 91%, despite the stock rising. This is a classic sign of a convexity squeeze taking place. It could still go higher first, maybe to around $980, but be careful. This squeeze can unwind at any moment, and options expiration is on Friday. (Paid subscriber content – T.W.A. – Gamma Speculative Squeeze May Push Stocks Higher – first 2-weeks are free!)

General Motors

General Motors (GM) may be heading higher. This past week there was a bunch of bullish betting taking place in this stock, and it has a bullish continuation pattern known as flag pattern. I think it could be on its way to $52.80. (Should be free to read- General Motors’ Stock May Be Ready To Surge Higher)

Wells Fargo

This week, I noted in another story that Wells Fargo (WFC) could be heading higher due to higher yields and wider spreads and based on some bullish option betting and a break out on the chart. An advance above $33.60 could send it towards $36.50. (Should be free to read – Wells Fargo Could Climb Even Higher)

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Disclosure: Mott Capital Management, LLC is a registered investment adviser. Information ...

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