World markets were pretty quiet overnight as the Summer trade continues. There were no real stand outs as European data is supporting some continued strength. The Nikkei tacked on another 1.3% to get it back on track after a multi-month consolidation. The Shanghai index eases off the highest level in almost two months.
Yesterday was another Summer day as this upper range continues to build with both two sided action. We now have a well-defined floor around S&P 1684 with a bigger area at 1671 to 1676. Unless we have a clear decisive break of this area with a close below, there is no reason to get bearish.
Resistance for adjustments stands at 1698-1702 then year-to-date highs of 1709. I'd navigate individual stocks as that's where we've been getting multiple set-ups for opportunities through earnings season.
The Banks have been quiet and consolidating. I think in order to get this market going they will have to wake up a bit, so we will go over them in today's Morning Call. They did perk up a bit yesterday.
Goldman Sachs (GS) held its 50-day moving average and had a nice bounce back to reclaim its 21-day and put in an engulfing bar. The stock has erased half of its losses from the recent pull back from August 6. It could see some upside follow-through above yesterday's high of $164.55.
Morgan Stanley (MS) also held above its 50-day and saw decent gains of 1.28% to reclaim its 21-day. A break and close above its 8-day at $27.17 could bring in some buyers.
Citigroup (NYSE:C) buyers stepped in at $50.74 to lift the stock up. C registered 1.71% of gains and has regained the support of its 8-day moving average. It has some room until the $53.20 resistance area.
Wells Fargo (WFC) has held the uptrend support since April and is basing at the $42.85-43 level. It could get some upside momentum if it could clear the $43.57 resistance area.
Bank of America (BAC) continued to hold the intermediate support at $14.25-14.33. The stock has gotten back above its 21-day moving average. A break and close above the 8-day at $14.60 could bring in more buyers. BAC has met my objectives outlined in my 2013 thesis, but I think it could see 20+ by 2014.
The casinos also are trying to set up for some type of movement.
MGM Resorts (MGM) is basing nicely above its 8-day to digest its earnings move. MGM has been holding above its 8- and 21-day since June 26th. The stock looks poised for a potential break out move above $17.50, keep an eye on this casino stock. MGM was also highlighted in my 2013 thesis.
Wynn Resorts (WYNN) also had a tight flag in place since August 1. The stock poked its head out of the tight range yesterday with 0.86% of gains. Look for potential upside continuation, as a break above $141.45 could set it back in motion.
Las Vegas Sands (LVS) is basing above its 21-day MA and holding its uptrend support since June 24th lows. The longer it stays above $55.84, the higher the probability we could see some upside momentum.
Caesar's (CZR) had a nice three-day move after having a clean break out of the bull flag pattern at the $16.55 area. Some digestion above $17.65 would be constructive.
Some other notables
Apple (AAPL) saw a huge move with some volume yesterday after Icahn disclosed large stake in Apple in a twitter post. The stock jumped more than 20 points to go as high as $494.66. Holding above $484-485 would show some commitment to this big move. I did an interview with theStreet yesterday prior to the Icahn tweet and still believe AAPL could see $500 soon. http://www.thestreet.com/video/12007201/trading-apple-ahead-of-new-iphone.html
Tesla (TSLA) has lost some momentum after filling its earnings gap to the down side. The stock is basing above its 8-day now. The longer it stays above this key moving average, the higher the probability we could see some buyers step back in. A break and close below $142 could bring out some sellers. The 21-day MA has proved to be a nice spot to buy for over six months, but this is at $135.24.
Yelp! (YELP) is holding above its earnings gap at $49.22 showing some commitment. Active traders could use this gap level as the new point of reference to trade against.
Oil Service ETF (OIH) perked up a bit yesterday. The stock is approaching resistance at $45.94. A break and close above this could lead to a move back to 2013 high at $46.78.
Inverse 2X Treasury Bond ETF (TBT) is almost at 2013 highs. I do think we could see a 3-handle on 10-year yields by sometime in the first quarter of 2014.
Although the indices have been choppy, there has been lots to do for the planned trader if you want to be involved for this Summer trade. You just have to learn how to find the in-play stocks and learn how to execute based on market conditions. I also don't think the highs of the year are in.
*DISCLOSURES: Scott Redler is long AAPL, NBR, JPM, BAC, VMW, OIH, IBM puts. Short SPY.