US stock futures are around the flat line this morning, pulling back in reaction to the latest income and spending data. Personal income was unchanged in October when consensus estimates projected a 0.2% increase. Personal consumption rose 0.1% against expectations of a 0.2% increase. Today is the last trading day of November, so we could see some quiet action as we digest the recent volatility. Overall, the market has showed great resilience: after at one point being down more than 4% for the month, we are now positive.
Although we have staged an impressive rally since the November 16th reversal, traders are still somewhat cautious after the technical damage we saw surrounding the election. The S&P is now re-testing its 50-day moving average, which could pose as some short term resistance at these overbought levels.
The fiscal cliff will continue to be a central focus for the market through the end of the year. In a positive sign yesterday, the market was able to shrug off pessimistic comments from House Speaker John Bohener, who opined that Democrats had only become more entrenched in their opposition to major spending cuts. The debate will almost certainly rage until at least Christmas, which is the soft deadline set by President Obama earlier week, and if we are going to continue higher the market will likely have to wade through some discouraging headlines.
Another healthy development in the market is the return of leadership. Apple (AAPL) reversed hard on November 16th and rallied harder than the indices. The next big hurdle for AAPL will be to reclaim its 200-day moving average, which is starting to curl down. After a $90 bounce, it would be healthy to see AAPL consolidate around these levels. As usual, it will be a key for the market through the end of the year.
Amazon (NASDAQ;AMZN) continues its impressive run since bouncing off the 200-day moving average. The stock has posted healthy gains on eight of the last nine days, with the only exception being a marginal $0.20 decline. AMZN is hitting a small resistance around the $250 level, but based on recent strength I believe it will be around 52-week in the next month or so.
Subscribers check out the morning Price Point Sheet and after-hours Off the Charts newsletter for more commentary and set-ups on individual stocks. Again, we are seeing some overbought readings, and on the last day of the month there is no reason to push it. In general, we have gotten some good tradeable action in November that should last through the end of the year.
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*DISCLOSURES: Marc Sperling is long WLT, V, ZNGA calls, ZNGA, S, ANTH, AOL, XHB, AOL calls, RENN, PCYC, JAZZ, FSLR calls, ELLI, FSLR, AIG, FB calls, RIMM calls, FB, TOL, BIDU calls, AAPL calls, FFIV, JIVE, SHOS.