Markets tried to resolve the five-day range to the upside yesterday but lacked volume and momentum. Overall most indices are still hanging in well, some better than others. The 8- and 21-day moving averages have been playing catch up in some strong sectors and look poised to potentially move again.
Futures are up 3-4 handles headlines point to positive China Data and ECB statements.
S&P micro resistance is 1467. A 30-minute close above this level opens the door for a possible re-test of the 1474 highs. If we get a market close in the next few sessions above 1474, shorts could have some choices to make if they want to continue with their opinionated thesis. Support sits at 1451-1457, which has served as a nice floor to trade against as the market digested those New Year's gains.
Banks flashed some micro sell signals yesterday. If you didn't take off some size into the strength, the push-through failures we saw yesterday could have given you the cue to trim your size and clean up excess positions a bit. Overall, a lot of people are saying that yesterday was the high of the year in the banks. I disagree, but you need to navigate them strategically and trade around your positions.
Bank of America (BAC) did fall pretty hard through its 8-day MA around $11.90 but it's had a heck of a move. In my opinion you could try to buy some back at the 21-day around $11.33. I would treat the $11.05-11.33 level as a support zone. I did buy some back on the close after taking some sales into strength.
Goldman Sachs (GS) didn't flinch yesterday and still looks good. JP Morgan (JPM) had a bit of a push-through failure but there is no need to run for the hills. We need to just see if there is no bounce.
Tech continues to be mixed.
Apple (AAPL) was under pressure again yesterday as it's not showing any commitment to any type of bounce. Today will be interesting as CEO Tim Cook is in China and there are reports that he met with China Mobile. Let's see if it can actually hold a gap and be buyable after 15-30 minutes. Lately any gap up has been sold. Micro resistance is at $525, then the next resistance level is $532. Let's see if it can have any power today.
Amazon (AMZN) is consolidating at highs and looks good.
Google (GOOG) is also working higher and has a nice pattern. It could get in motion again above $740.
Intel (INTC) is showing some signs of life as a laggard trade.
Facebook (FB) has been a MONSTER. The stock has been a great vehicle for us since November and has started to play by many bullish technical rules. Using a tier system has been key. I would trim some if you haven't already into this up open rather than chase it higher, but that doesn't mean it's a short.
LinkedIn (LNKD) has been quiet but looks tight enough for a potential additional move. If it can clear $115.50-116.50 perhaps it could move better.
Ags have been acting better. Monsanto (MON) has been best-in-breed of late. CF Industries (CF) just started acting better. PotashCorp (POT) and Mosaic (MOS) also are seeing better inflows to start this year.
Inverse Bond ETF (TBT) is trying to protect its gap and 8-day moving average. I nibbled some back in the $65 area. Holding this could be very constructive for faster action.
Oil is up on the China news. The refiners (OIH) and Energy ETF (XLE) have mid-level consolidations. OIH needs to stay above 40 and then clear $40.67 to start getting attention from momentum guys, in my opinion.
There has been lots of nice rotation and action for those using some quick feet, or those just keeping them planted with a bit more patience.
We are hosting a 5-day Trading Lab on our lower Manhattan trading floor during the week of January 21st. The Lab is an intensive trading education boot camp, and in addition you get exposed to a dynamic, live trading environment. In my opinion, this is one of the most valuable trading education experiences we offer. There are still a few spots left for qualified individuals, so if you are interested fill out an application.
As a New Year's special we are also offering a $500 credit towards any one of our T3Live Online Courses.
*DISCLOSURES: Scott Redler is long GOOG, INTC, BAC, TBT, FB, F, YHOO. Short SPY.