Futures were down seven handles early this morning after some soft European data weakened the Euro, but are bouncing a bit as we get closet to the open. Bulls and bears alike would welcome some type of pull-back to loosen up the action a little bit, could we finally get some follow-through to the downside today? Yesterday the market showed some weakness intraday, but rallied into the close to finish positive once again. This rally has been getting a little long in the tooth," so this is not terribly surprising. Most of the indices have been in tight ascending channels that are great to ride until they break. When they do break, it can often lead to a pull-back.
As I stated yesterday it has been getting harder to find good ideas and I think I went down to my least involvement from the long side since the rally that started around Thanksgiving.
S&P futures are below the 1514ish level and 8-day moving average. Let's see if we can close below those levels. Next support is 1509 then the 21-day which stands at 1500. That could be great to see for dealers as options expire this Friday. We shall see.
The 8- and 21-day moving averages have been a great guide to navigate this recent trend so it's prudent to see how different sectors handle them for market composure and short term direction.
The Financial Sector ETF's (XLF) 8-day moving average stands at $17.65, so let's see how it handles that area. The financials have been a great leading indicator for this market, as they have taken charge in the absence of leadership from tech.
Goldman Sachs (GS) has been a great leading indicator for the market and has one of the longest ascending channels in the sector. Watch the $151.71 level as Goldman hasn't closed below its 8-day once in 2013.
JP Morgan (JPM) did have its ugliest candle of the 2013 yesterday as well, which is a bit of caution sign in my opinion.
Tech remains mixed.
Cisco (CSCO) reported earnings that were okay but the stock has come a long way so a bit of a retracement makes sense.
Apple (AAPL) saw some fast money leave on Tuesday and now it needs some time as a two-way trade. Holding above $460-$463.50ish would be somewhat constructive to keep this recent move in the game for continuation.
Netflix (NFLX) still acts great and could be worth a look for a trade if it takes out yesterday's high of $186.40.
Amazon (AMZN) blasted off yesterday and hurt some leftover shorts that were trying to lean on this as it looked like it was starting to break down. AMZN is often a very tough stock to deal with technically. I will take a look today to see if I can make a trade to go positive for cash flow.
Baidu (BIDU) is still vulnerable in this pivot but it wasn't ready to break down yesterday.
VMware (VMW) did give some downside follow-through for those shorting it under $77.
eBay (EBAY) is dancing around its break out level of $57.20 but hasn't had its momentum move yet.
Yahoo! (YHOO) trends higher and remains strong.
LinkedIn (LNKD) is very strong but very extended. If you are looking for a quickie, I think you could see some momentum come in above $158-159, but take caution with this upper level type trades.
Facebook (FB) is trying to find a bottom since earnings. It did bounce a bit yesterday, so now $27-27.30 is your new support with a resistance obstacle at $28.50-28.75.
Metals are doing what they can to hold bigger support, let's see if they get a bounce on what could be a down day.
Gold's ETF (GLD) has big support at $158.50ish, and there is small gap that starts at $160.05.
The Euro Trust ETF (FXE) is continuing lower this morning. We talked about Draghi potentially talking down the Euro into the last ECB meeting, and it appears that is occurring.
As far as the Yen devaluation trade, The Yen Trust ETF (FXY) seems like it could turn the corner with a trade and close above $105.50-106 for a potential counter-trend move higher.
From a pure momentum perspective, the 3-D printing stocks remain very much in play. I think there have been some signs for caution to the long-side with these stocks, but we will be watching key points of reference. Stratasys (SSYS) has been the weaker one in the group, breaking out of an ascending channel early this week and being unable to hold its State of the Union-inspired gap up yesterday. 3-D Systems (DDD) is holding up better, but saw some big selling volume at times yesterday and feels a bit fragile at these levels.
If you like to focus on these types of high-momentum stocks, make sure to take a trial of Mike Lee and Steve Levay's Momentum Trader Mentoring Room, where they have been keying in the 3-D printing sector.
*DISCLOSURES: Scott Redler is long GM calls, GE, BAC, MSFT, TBT. Short SPY.