Stocks Are Trying To Break Out On June 19

Being in the business of trying to predict the future is not easy. So far, today isn’t going according to the plan I drew out last night, but such is life. The S&P 500 futures are moving higher today by about 90 basis points. The index is trying to break out at this point from the downtrend that started on June 10; if it can close above that downtrend, there probably isn’t much that can stop it from rising back 3200. 

The problem is, it is hasn’t officially broken out yet, so we shouldn’t get too excited about the potential for further gains. Currently, the ES is basically on the downtrend and trying to push through. 

Further, the SPY hasn’t even broken the downtrend yet. So this is somewhat critical because the $314 level has been very stiff resistance for the ETF. The significant headwind today is quadruple witching and the S&P 500 rebalance. Again, if the S&P 500 can break the downtrend, it could rally rather sharply. So we can watch the ETF for a breakout, but still, it needs to break that $314 region and close above it. If it can’t, then no, break out, and it likely means we continue to grind lower. 

Again, as I noted last night, we are going to see a big move today, and to this point, it seems like we may get that. The question is which way. My thought yesterday was that the trends were lower, and that wedge pattern forming was a continuation of the downtrend. To this point at least, it seems the market disagrees with my thought process.

Germany (EWG)

Germany is trading higher this morning, too but is struggling to break out and has stalled at resistance at 12,460. 

Roku (ROKU)

Roku has seemingly come back to life, and the stock is seeing some bullish momentum, with a rising RSI. The stock is trying to break out at $128, and I think it can, pushing to $135 next. 


Alibaba (BABA)

Alibaba will get a boost after its price target was raised to $270 from $260 at Barclays. I have been seeing some bullish betting in this one at the start of the week. For now, $231 remains the next level of resistance.

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Disclosure: Michael Kramer And The Clients Of Mott Capital Own AAPL

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William K. 5 months ago Member's comment

An interesting article. And I point out that the past is far more predictable than the future, and usually with much greater accuracy. Unfortunately, gaining any insight from the past is much more difficult, since it requires knowing and understanding the causes involved.