Futures are trading near the flat line this morning as investors wait for Alcoa (AA) to mark the beginning of earnings season tonight. The market was extremely quiet yesterday following a very strong start to 2013. S&P 500 ETF (SPY) volume was the lowest for a full session since the day before Thanksgiving, which is not altogether surprising considering the whirlwind we have seen in the market over the last few weeks surrounding the fiscal cliff negotiations. Rest and consolidation are healthy for stocks.
The banks continue to lead the market higher, and yesterday were able to shrug off a mortgage settlement with the Department of Justice. Based on the price action, such an agreement was already price in, and it is positive to see the sector shrug off the news. Wells Fargo (WFC) kicks off bank earnings before the open Friday, and we may need to see strong reports to send the group higher following a very strong run.
Apple (AAPL) has evolved from a compelling swing trading stock to more of just a short-term trading vehicle, in my opinion. The price action remains decidedly heavy as the stock underperforms the indices. AAPL tried to find support at $510 yesterday but ran out of steam in the afternoon yesterday. The level everyone is watching is $501.23.
Amazon (AMZN) has taken the mantle as market leader in high beta tech. A Morgan Stanley upgrade yesterday propelled the stock to a 3.6% gain and new all-time highs. AMZN has been holding up extremely well in the upper end of its range, so yesterday's breakout is in keeping with its recent character. Now may not be the time to initiate new longs in the stock, but it's a healthy sign for the market to see stocks breaking out.
Google (GOOG) rested yesterday and is coming into a little bit of resistance after an impressive comeback from its last earnings report. The stock may need to consolidate in this area before the next leg higher.
The 3-D printing stocks, 3-D Systems (DDD) and Stratasys (SSYS), will likely continue to be in play for momentum traders after their recent impressive run higher. The technology is not new, but starting to receive a little more attention from Main St, it seems. After recent extensions, now may not be the time for new longs, but these are worth keeping on your radar.
Overall, today might be another quiet day as investors take a deep breath following the volatile holiday period and strong start to 2013. With the S&P at five-year highs, expectations may be running high for earnings season, and it will be important to take stock of the early reports.
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*DISCLOSURES: Evan Lazarus is long SPY puts, short SPY.
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