Morning Call: Watch Short Term Composure: 10day Moving Average is Still Important
DOW 13,000 and SPX 1370 proved to be tough obstacles last week. Last week we tested them a few times but failed to close above. Market volume has been light but we still see constructive action. Nice rotation and sporadic break outs. Oil and other commodities were strong last week and broke higher, with some select leaders.
Today, we come in and the futures are down 6-7 handles. News out of the G-20 disappointed some as they rebuffed calls from the Euro area to boost international lending resources. I did see a small divergence in the housing sector and semiconductors towards the end of last week, but each day different groups diverge and then don’t fall apart. We need to see if that continues.
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The 10day moving average still supports this market and it needs to be watched closely for short term composure and speed. With the S&P futures down 6-7 handles, we will be watching support this morning. The 10-day moving average stands at 1354. Keep an eye on how the market handles this in the first 30-60 minutes of trade. More importantly will be how we close.
Big support right now stands at 1342-1344. The 20-day moving average now stands at 1344. We have not even tested this average since the December 20th Gap and Go.
TECH
Apple (NASDAQ:AAPL) remains impressive. Stock has had a huge move since earnings and still acts well. It worked off that major reversal on 2/15 to hold its 10 day moving average. Stock is now in from of its previous high that could give it a pause. See if it can go green for a cash flow trade today, but I would like to see a few days of consolidation before it attempts to take out $525-526 pivot high.
International Business Machines (NYSEArca:IBM) had a nice break out last week, holding above $195 would be good.
Salesforce.com (NYSEArca:CRM) had great earnings, and gave investors upside follow through. We outlined this when it broke it’s descending channel in the $120 area
VMWare (NYSEArca:VMW) also had a nice move but can use a rest.
Google (NASDAQ:GOOG) is trying to hold the mid-level range but is not compelling. If you’re long make sure it holds $597. If you are looking for it to go in motion to the upside, it needs to clear $615-618.
Intel (NASDAQ:INTC) is trying to hold important support. I think it’s pretty important to hold $26-26.30.
Netflix (NASDAQ:NFLX) stock has been a great vehicle to trade in 2012. Recently guys caught a nice short below $122-120. The stock partially filled its earnings gap and now has a three day range to trade against. Recent low is $108.54. Watch closely.
Amazon.com (NASDAQ:AMZN) I still think we have a Macro Bearish Pattern developing. A trade and close below $170-$175 should put this in downside motion. It’s tricky to trade, but worth keeping on the radar.
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 StreetJournaland Investor’s Business Daily among other publications. Scott produces much of the media and content available to subscribers and followers.
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*DISCLOSURE: Scott Redler is Long (NYSEArca:SPY), (NYSEArca:OIH), (NYSEArca:IBM), (NASDAQ:INTC), (NYSEArca:MMM), (NYSEArca:BA), and (NYSEArca:JPM). Short (NYSEArca:DIA) and (NASDAQ:QQQ). Long (NASDAQ:AMZN) and (NYSEArca:SMP) puts.
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