This Is Why Stocks May Rally The Week Of Feb. 4

Domestic Markets

S&P 500 Futures +2 as of 7:45AM
US 10-Year 2.70%
Dollar Index 95.72
Oil $55.29.

International Markets

Nikkei +46 BPS
Shanghai – Closed
Hong Kong HSI +21 BPS
KOSPI -6 bps
German DAX -30BPS
UK FTSE +25 BPS

Key Events for February 4:

  1. Factory Orders
  2.  Earnings:
    1. Monday PM
      1. Alphabet
      2. Gilead
      3. Seagate
    2. Tuesday AM
      1. BP
      2. Viacom
    3. Tuesday PM
      1. Snap
      2. Disney
      3. Electronic Art

International Markets Near Turning Point

KOSPI

The South Korean KOSPI has continued to rise in recent days and is now stalling out. The index has filled the gap at 2,210, which is the level we had looked for, now it is facing a steep downtrend at that level. This will be a big test not just for Korea but the entire global equity complex.

With the RSI at overbought levels, my expectations would be for a minor retracement in the index over the coming days. But the trend in the RSI is now higher, and that would suggest the index does move higher after a slight pullback.

kospi

Hong Kong Hang Seng

We can see that the Hang Seng is nearing a resistance level and is also facing a downtrend, which is it is trying to rise above. At this point the RSI suggests more gains to come longer-term. However, the RSI over the short-term is overbought and indicates the index pulls back as well.

hong hsi

UK FTSE

The UK FTSE does have further to climb from its current level of 7,040 to around 7,120.

uk ftse

Overall global equity markets are hitting a rough patch, and I’d expect this to play out during the next few days or perhaps the balance of the week.

US Markets

S&P 500 (SPY)

The S&P 500 still appears to have a bit further to rise and has a reasonable chance to get to around 2,800 in the coming days. The chart shows that if the index can get over 2,720, it has a clear path higher towards 2,800.

S&P 500, spx

Russell 2000 (RUT, IWM)

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Disclosure: Michael Kramer and the Clients of Mott Captial own Netflix, Tesla, Acadia

Disclaimer: This article is my opinion and expresses my views. Those views can change at a ...

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