Home > Morning Call: Dip Buying Opportunity as Debt Ceiling Talks Enter Crunch Time
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Morning Call: Dip Buying Opportunity as Debt Ceiling Talks Enter Crunch Time

July 18th, 2011

S&P futures are down about 10 handles this morning as we come into the crucial area that must hold for the bears to maintain much hope for the short-term. After a choppy week with mixed action, we will get some key earnings from some more banks and momentum names this week. The tech sector got a big boost last week from Google Inc. (NASDAQ:GOOG) earnings, which blew out estimates, sending the stock 12% higher overnight. Precious metals got a big boost after some suggestion of QE3 and more worries from Europe. Gold is now opening above $1600 this morning.


Traders are getting a bit frustrated by the erratic nature of this market, driven largely by headlines. The debt ceiling talks are dominating the conversation right now, and it’s unfathomable to think they won’t get a deal done. Every day that goes by is an embarrassment as our elected officials care more about their egos than their constituents.

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SPY- The Key area that must hold is $128.75-129.60. Opening below it’s 50day is not good, so they need to reverse this market quickly.
If you were waiting for a dip to buy, and believe in this market, here it is.

Tech
Apple Inc. (NASDAQ:AAPL) still seems to me to be a must-own investment, and ahead of earnings Tuesday it is getting some serious attention. In the last half hour on Friday an aggressive buyer came into AAPL sending it 4 points higher. A break above all-time highs was the momentum entry.
Amazon.com, Inc. (NASDAQ:AMZN) is setting up nicely. This stock hit highs last week and has a nice upper flag to use for an entry. Above $214.75-215.25 it can go again.
Netflix, Inc. (NASDAQ:NFLX) has been very choppy lately. It will probably wait for earnings before making another major move, and I’d avoid until then.
Google Inc. (NASDAQ:GOOG) had a monster earnings report and took off after-hours. It will probably need some time to base if it is going to go higher. I’d trade it vs. the $588 earnings gap. If it can hold here for a few sessions, you could potentially look for a cash flow buy above $600.25.
VMWare, Inc. (NYSE:VMW) is holding up very well. Above $103-104 and it can see new highs again. Earnings are out this week.
Salesforce.com inc. (NYSE:CRM) is also holding higher. Above $155 and some momentum can come back to the long side.

Baidu.com, Inc. (NASDAQ:BIDU) is still on the move, with multiple buy set ups. Up 25 points from the $127-129 buy zone. It now looks ready to add momentum above $147-148.
SINA Corporation (NASDAQ:SINA) punishes those on the wrong side of the market. It’s up almost $25 points above the trigger long around $93.50. It now broke above the longer term descending channel that stands around $115-$117.

LinkedIn Corp. (NASDAQ:LNKD) was very impressive. $110.50 is another pivot to watch.
Yandex NV (NASDAQ:YNDX) is sloppy but holding above $33 and one day will get above $36 and hold with volume.

Oil Service HOLDRs ETF (NYSE:OIH) acts pretty well holding higher. As long as it holds above $148-149 you can add above $154-$155.
Halliburton Company (NYSE:HAL) acts very well above $53.20-54, and strong earnings this morning will likely see it test the upper end of the new base, around $54.50.
Baker Hughes Incorporated (NYSE:BHI) is very tight next trigger is $75.60-77.
Occidental Petroleum (NYSE:OXY) is very tight. $106 is a trigger buy then $108.

Caterpillar Inc. (NYSE:CAT) looks good from the $102 trigger and now can get going again above $110.

Agricultural group acts much better
PotashCorp/Saskatchewan (NYSE:POT) is moving well from our $55-$56 buy area. Next pivot to clear is $59.50ish.
Monsanto Company (NYSE:MON) is holding up well. I’m watching $75-$76 as the next pivot buy zone.
CF Industries Holdings Inc. (NYSE:CF) above $154.25-$155 and we should see new highs again.

Casinos are acting well.
Wynn Resorts Limited (NASDAQ:WYNN) hit new highs on Friday after a nice bull flag around highs.
Las Vegas Sands Corp. (NYSE:LVS) has been in a long channel since late October. It looks okay if volume can come in and break this pattern to the upside. This area is $45.25-46
MGM Resorts International (NYSE:MGM) looks decent. $15-$15.25 is the new buy zone for momentum.

Lots of headlines and earnings to deal with this week, so be on your toes. During the economic recovery earnings seasons have been strong, so we expect that trend to continue. While there are Euro jitters and debt ceiling concerns, I do see some constructive patterns forming for higher prices. Today is pretty important as this new rally is “under pressure”, another distribution day and the technicals will turn more bearish.

Scott Redler
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 SLV, AAPL, MGM, LVS, OIH, JPM. Short SPY.

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NYSE:OIH, NYSE:SPY


 

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