Morning Call: Futures Recovering From Overnight Lows, Europe Woes in Focus
Markets opened sharply lower yesterday and really never looked back. Some strong stocks tried to hold higher like Friday but it felt different; they couldn’t absorb the pressure. SPYs tried to hold the 50day moving average “zone” around $131.80-132.10. They took out this area last night and we are set to open about 12-14 handles lower as the spreads on Italian and Spanish debt reach record levels. The futures were down even more sharply overnight but have recovered in the last half hour.
These headlines area hard to ignore, and as we stated yesterday, it seems a bit reminiscent of the run on the banks two years ago that caused major volatility. IBD put this rally back “under pressure”. At this point there’s been some technical damage but it’s not “severe” yet. Today should be important, breaking the 50day is significant and now we need to see if we can hold half this rally to keep the composure in any type of check.
Support on the (NYSE:SPY) is $130.70 -129.60, this is the last stand that bulls most make to keep any hopes of a stronger up move in the short term. I will try and nibble today in this area for a trade, and see if some leading stocks can give us some opportunity now that they worked off some of their overbought nature
TECH. Look to the 10day moving average then the 20day. The strongest stocks will try and hold those levels.
(NASDAQ:AAPL)- This stock went positive briefly yesterday to let some of us out of our longs and still looks good. $348-352 would be a nice area to hold as this would be the re-test of the channel break we saw last week. I will look here for cash flow opportunities off the open. The 10day is around $345 and the 50day is $338.53.
(NASDAQ:AMZN)- yesterday was the first day they didn’t really “protect’ this one. Still looks good- the 10day is $209 and then the prior high to look for support is $206-$207
(NASDAQ:NFLX)- did a short term Reddog reversal sell signal as it traded thru $297.35 and then back below- this is that “trap” set up. A day to take notice. This can see $277-280 where some dip buyers might come take a look.
(NASDAQ:GOOG)- after a strong move off the lows- it’s starting to correct- it looks to fill a gap and it could be buyable around 521-525. There is a gap that can be filled. Then $518 is where the 50 and 10 day converge.
(NYSE:CRM)- stock put a bearish candles a few days back and is now looking to test it’s 10day around $151.45. I will see if this is buyable around $148 then the bigger area around $145-146.
(NYSE:VMW)- trying to hold its 10day but might see a retest of $98-99.
(NASDAQ:LNKD)- this stock has been a monster, and it gave you a way out if you were long yesterday and even pushed up 4 bucks, before reversing back thru the previous high as a sell signal (that was $101.50). The stock needs time now, some support around $95 bigger level is around $90-91.
(NASDAQ:YNDX)- this stock also went positive and tried to push then had a nasty failure- with a sell signal when it pushed thru $36.33 and then came back below for an outside day.
(NASDAQ:BIDU) is opening below it’s 10day moving average today. I think $133-135 could be a nice area to buy the dip. This is where all the moving averages collide
(NASDAQ:SINA)- stock opened down 3 and showed extreme weakness in the first 15 minutes, giving clues to run for the hills. This then went about 10 points lower. This broke the upper moving averages and seems like it can get back to $96-98 then it will be worth a look again for more than a scalp.
(NYSE:OIH) turned lower with oil yesterday. This group is not leading but worth looking at. I would look to see if 50day is buyable around $148. The lower pivot break out –retest stands around $145-146
(NYSE:RTH)- this group was very strong and if you were looking to buy a pullback $109.21-109.75 is a decent zone. Then the major area is around $107.60-107.90.
GOLD has been tricky to trade but strong. Last week it was telling us that some more problems would come out from the Euro zone. (NYSE:GLD) is opening lower today- $150 is support a gap fill would be $149.44 and then the moving average support is around $148.20-148.50.
Earnings from AA were nothing special. Earnings from NVLS and some other semi’s were also light, if this is the trend. We can see more pressure in these markets.
Banks still can’t find a friend. BAC is at low’s of the year. European banks are getting crushed. We’ve been saying one day this will matter.
Today is very important for this market. If it puts in another distribution day like yesterday. Technicians will say the rally is over. I will see if we can buy this down open in SPY and leading stocks. Look to wait for the first 15-30 minutes, let the market put in a low, and then trade against it with a stop. ALSO, see if anything can go green and show relative strength and then lead today.
I spoke to a lot of frustrated shorts in the last few days- guys that tried to short spy from $132-134 and then covered before the job number. With this volatility there is opportunity going forward.
Scott Redler is the Chief Strategic Officer of T3 Live. He develops all trading strategies for the service and acts as the face of T3 Live. Mr. Redler focuses on thorough preparation and discipline as a trader. Scott Redler has been trading equities for more than 10 years and has more recently received widespread recognition from the financial community for his insightful, pragmatic approach. He began his career as a broker and venture capitalist where he was able to facilitate relationships that led him into trading. Beginning his trading career at Broadway Trading in 1999, Scott moved on with Marc Sperling to Sperling Enterprises, LLC after establishing himself as one of the best young traders in the firm. As a manager at Sperling Enterprises, he maintained his status as a top trader in the industry while working closely with all traders in the firm to dramatically increase performance. Scott has participated in more than 30 triathlons and one IronMan triathlon, exhibiting a work ethic that also defines his trading. His vast knowledge and meticulous attention to detail has led to regular appearances on CNBC, Fox Business and Bloomberg, and he has been quoted in the Wall Street Journal and Investor’s Business Daily among other publications. Scott produces much of the media and content available to subscribers and followers. T3LIVE.com is an online financial media network and education platform that provides active traders and investors with market analysis, real-time access to strategies, and in-depth training from real traders, real-time.
*DISCLOSURE: Scott Redler is long SPY and AAPL
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