S&P futures up one or two handles this morning as it was a fairly quiet holiday weekend overall. Some bears thought/hoped we might get some fireworks out of the G20 summit, but, besides the meteorite, the prevailing tone is that the world remains committed to easing and central planning. We have Fed Minutes on Wednesday, so that will give us more clues into what central bankers are thinking. We will look for signs to see what the pace of purchase for QE might be for the rest of 2013. Thursday we have Flash PMI's for Europe.
As for the market in 2013, the roadmaps for traders have been the 8- and 21-day moving averages. It's been a very stair-step approach for the indices as they all take turns making new highs. Some indices and sectors have more power than others, but we continue to see nice rotation.
The S&P 500 ETF (SPY) has support at around $151.55, while the 8-day is $151.77. The 21-day MA, which we haven't touched in 2013, stands at $150.33. Pivot resistance is now $152.60, with the next resistance above that at $153.20.
It's been a stock pickers game as all names have not been created equal. Tech in particular has been very mixed.
The strongest momentum tech names have been LinkedIn (LNKD) and Netflix (NFLX). Both had powerful gap and go type movement after their earnings. Pivot resistance for NFLX is $190, and pivot resistance for LNKD is $163. It's hard to chase either stock at these levels, but I also don't believe you should have short on the brain.
Google (GOOG) has been the best-acting high-beta name at historic highs. This also had a nice gap up on earnings that traders could have entered against. There have been opportunities to enter as well at around $760 and then $788, and now GOOG is now opening at highs. The Eric Schmidt selling news had no effect on the stock, it was just a buying opportunity. At this point, like many other things, if you are in the move then trim and trail. If you are looking for cash flow, $793.26 is the pivot.
Yahoo! (YHOO) has been choppy and erratic, but continues higher. Support is around $20.00, while resistance is $21.43.
eBay (EBAY) has a nice set up if it can ever take out $57.26 with authority for a trade. Despite the lack of breakout momentum, this has been a great move for longer-term players.
Amazon (AMZN) woke up last week, let's see if it can see commitment. The stock should hold $263 if it wants to stay on traders radars, in my opinion.
Facebook (FB) had a decent bounce off the $27 area, now it needs to hold $28 in order to keep my attention for an add-on trade above $28.75.
Apple (AAPL) had a nice move from $435 back up to $485, then last week it gave back a bit more than some would have thought/liked. The investor meeting is not until next week, so I believe AAPL could twist in the wind until then. Friday was disappointing for anyone look for commitment as it shouldn't have broken $463-465. It needs to reclaim this area quickly to show maybe it was due to options expiration. Anyway, the support pivot to watch now is $459.92. See if it can hold today's gap up. I'm approaching it day-by-day until I see a clear change in the price action. A potential new dividend or possible iWatch announcement might be the catalysts AAPL needs.
Last week in our Off the Charts newsletter we highlighted some faulty action in the 3-D printing stocks and they all got hit pretty hard. These stocks should continue to be very much in play, either due to follow-on weakness or a porential buyable bounce.
Stratasys (SSYS) was the weakest of the 3-D printers. On January 28th we got the first breakdown in the stock, and then we highlighted the ascending channel on Off the Charts that potentially forecast another leg lower. SSYS broke down out of that channel again at $80ish on February 12th and has been crushed. I will see if we could get some type of Red Dog Reversal 80/20 trade at Friday's pivot of $68.
3-D Systems (DDD) also got hit but not as hard. The bearish catalyst late last week was a bearish article released by Citron Research, which is know for its "bear raids" on often popular stocks. DDD broke $62 area with some force, and the pivot to watch for action now lies around $58.47. Take care with these stocks and keep them on a short leash if you choose to trade them.
ExOne (XONE) is the recent new issue in the sector, and worth a look if the group continues to move. Friday's low to use as a point of reference is $25.37.
Banks continue to move as a group, but at select times they also take turns.
Goldman Sachs (GS) has a very long ascending channel. If the sector is going to retrace a bit, I believe you would need GS to close below $153ish. Continue to follow the trend until it breaks.
The Financial Sector SPDR ETF (XLF) has an upper area to keep an eye on is $17.70.
Oil stocks are a very tricky group. Many of the stocks in the sector broke out on Thursday, and then gave back those gains, and then some, on Friday. That type of price action illustrates why I typically just jump in and out of that sector for cash flow.
The Oil Service ETF (OIH) needs to hold $43.80ish to keep fast money looking at it.
The Energy ETF (XLE) got hit harder on Friday, and important support lies at $78.
Michael Kors (KORS) looks good as it held the earnings gap and could see higher prices.
Dunkin' Donuts (DNKN) also looks set up for another run over $37.92. In my 2012 predictions thesis I talked about DNKN as a very successful IPO that could be a longer-term hold.
Metals got beat up after resolving the wedge/triangle pattern to the downside.
Gold (GLD) was either going to break and hold above $163 or break and close below $161. The ETF resolved to the downside, giving longs an area to stop out and shorts an area to jump in. Friday GLD hit a low of $154.56. The ETF is looking a bit oversold, in my opinion, but on the longer-term it still looks very much broken. There is small resistance at $156.58, and then an open gap up to $158.04.
To have success in the market right now, you have to have a clear understanding of your own time frame. Macro investors are getting rewarded for staying the course, intermediate-term trend traders using portfolio approach have had a nice road map with the 8- and 21-day moving averages, and active/momentum traders are getting rotation for decent cash flow set-ups. Develop an approach to trading and wait for the market to confirm it.
With all that said, this is the least long exposure I've had on since the Thanksgiving holiday. I have trimmed and trailed most of my long positions to the point where I am out of most. While it does pain me a bit to see my favorite stocks extend a bit without me, I will always tend toward the more compelling risk-reward areas on the chart. You never go broke taking profits, and when things get a little more testy going to a tactical approach makes me most comfortable.
*DISCLOSURES: Scott Redler is long BAC, GE, MSFT, FB. Short SPY.
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