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Morning Call: Short-term Uptrends Under Pressure as Greece Bailout Back in Limbo

February 16th, 2012

US stock futures are slightly lower Thursday morning amid renewed uncertainty about the Greek bailout. The on again, off again negotiations regarding austerity measures and financial reforms still haven’t produced a result that European finance ministers are happy with. The Euro fell below the $1.30 level vs the dollar overnight as some expect to Greece to ultimately exit the Euro zone.

Also weighing a bit on the market is a threat from Moody’s Investors Service to downgrade many global banks, including JP Morgan (NYSEArca:JPM), Morgan Stanley (NYSEArca:MS), and Goldman Sachs (NYSEArca:GS). JPM and GS could get a two-notch downgrade, while MS could get pegged back three notches.


Another factors traders and investors will be watching closely today is Apple (NASDAQ:AAPL). The stock, after a remarkable run higher in 2012, staged a nasty outside reversal yesterday that could lead to more downside. The stock closed 5.5% off its highs of the day yesterday, punishing buyers who chased the stock higher above $500. Given that AAPL has a 17% weighting in the Nasdaq, any additional weakness could drag the rest of the market down as well.

In earnings news, Nvidia (NASDAQ:NVDA) is off pre-market after the company issued guidance below Street expectations. Nordstrom (NYSEArca:JWN) and Molson (NYSEArca:TAP) earnings reports are expected before the opening bell.

Futures trimmed losses this morning after the jobless claims number came through. The figure fell 13,000 to 348,000, another strong figure that lends credence to the idea that the US recovery is starting to at least show more consistency, if not speed.

TECHNICAL TAKE

Yesterday we got our first small technical composure change in the last eight sessions as we closed below the 10-day moving average. The question for traders at this stage is, how deep of a correction will you look for to cover any shorts or buy back stocks? Do you cover into the important upper floor on the S&P of 1333-1337, or can you add/press for a break below that level for what can lead to healthy corrective action.

The Bulls have a been a bit spoiled lately, riding the 10-day moving average for this length of time usually doesn’t take place. A test of the 20-day or some lower Fibonacci retracements should help refuel the energy of this market at a later time.

If we get a 30/60 minute close below S&P 1333-1337, or a daily close below, that can open door to test more intermediate up trends. The 20 day is around 1331 and the 25% Fibonacci retracementstands at 1320. The 38.2% Fib retracement and the floor from January 30ths comes in around 1300.

Scott Redler Scott Redler is the Chief Strategic Officer of T3 Live. He develops all trading strategiesfor 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 Journaland 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.

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*DISCLOSURES: Scott Redler is long (NYSEArca:SPY), (NYSEArca:OIH), (NASDAQ:QCOM). Short (NASDAQ:QQQ), (NYSEArca:DIA).


NASDAQ:QQQ, NASDAQ:QQQQ, NYSE:DIA, NYSE:OIH, NYSE:SPY


 

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