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Morning Call: Market Looks to Hold Gains from Yesterday’s Snap Back

April 18th, 2012

Yesterday Tech finally had some power as the market snapped back to some broken trend lines. What was perceived as a decent Spain debt auction and headlines of a positive U.S earnings helped propel the market higher. Add an impressive Apple (NASDAQ:AAPL) bounce to the mix, and you had a recipe for strong gains.

At this point trading has been choppy with multiple divergences, but the S&P 500 and Nasdaq are only about 2.5% off their highs. Only 4 of the IBD 50 are below their 50day moving average. So this corrective phase has been fairly muted as of yet.

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Lots of market participants are asking, was that the correction? At this point some areas were hit harder than others, and timing entries and exits are still key. I’ve narrowed down my time frame and have been taking opportunities from the Long and Short side as I think this market still has a lot to prove. There’s  no need to have “too much” exposure, but you can’t fight the tape either. This is not a time for opinions, just trade the action and read the tea leaves. It’s been working very well, using a tier system with high and low level stops have kept many safe and on the right side of the tape.

S&P futures are off a few handles this morning, but that makes sense after yesterday’s gains. How we digest those gains will give us insight to some future market direction.  Do we hold top third of yesterday’s range, or the top half?

First support on the S&P stands at 1386-1388, which would be a high level to hold. This would keep some pent up bullish momentum in the tape (this would be impressive). The next level is 1378-1382, an area that needs to hold to keep a constructive stance (this area is more realistic). A close below this level and we will see more choppiness. More macro support are the two pivot lows at 1365 (from 04/16) and then 1357 from (4/10).

Resistance stands at yesterday’s high of 1392. The next area is 1397-1403, a very big area. A close above this would put some frustrated shorts on the run.

Seems like they bid up some of the stocks into earnings and then have been selling them on good/decent reports. Examples have been JP Morgan (NYSEArca:JPM), Goldman Sachs (NYSEArca:GS), Intel (NASDAQ:INTC), International Business Machines (NYSEArca:IBM) and Google (NASDAQ:GOOG).

Know your time frame and risk tolerance.

Here is my CNBC appearance from yesterday talking about AAPL.

Apple: The Good, The Bad & The Ugly Tuesday, 17 April 2012 3:41 PM ET Discussing Apple’s comeback, with Robbert Van Batenburg, Louis Capital and Scott Redler, T3live.com, who both made gutsy calls on Apple just before the company’s breakdown Source: CNBC.com

Scott Redler is the Chief Strategic Officer of T3 Live. He develops all tradingstrategiesfor 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 tradingequities for more than 10 years and has more recently received widespread recognition from the financialcommunity 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 tradersin the firm. As a manager at Sperling Enterprises, he maintained his status as a top trader in the industry while working closely with all tradersin 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 Businessand 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.

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.   This material is being provided to you for educational purposes only. No information presented constitutes a recommendation by T3 LIVE or its affiliates to buy, sell or hold any security, financial product or instrument discussed therein or to engage in any specific investment strategy. The content neither is, nor should be construed as, an offer, or a solicitation of an offer, to buy, sell, or hold any securities. You are fully responsible for any investment decisions you make. Such decisions should be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance and liquidity needs.Visit the T3Live Homepage, Virtual Trading Floor, and Learn More About Us.

*DISCLOSURES: Scott Redler is long NASDAQ:AAPL, NASDAQ:DNKN.

Thanks for all your well wishes for the Boston Marathon. It was a battle with the heat, but a Battle worth fighting.


NASDAQ:QQQ, NASDAQ:QQQQ, NYSE:SPY


 

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