Morning Call: Don’t Fight the Trend, but Stay on Your Toes in Thin Tape (GLD, SPY, SLV)
Market continues to provide opportunity as we head to the end of August. Spanish and Italian Bonds dropped to a six week low. The Bears say it’s the quiet before the storm, the same way we were stalling around 1400. Anyway, they also say the Bulls will “get their’s”, but if you trade ‘em and trail ‘em using a tier system like we teach in the T3Live Active Trading Course, Bears can’t take your money unless they rob you by gun point. I think it’s been a pretty tradable few weeks/months. At this point, traders shouldn’t lose their discipline or start getting giddy, because there is no need to give back hard earned gains.
This morning futures are quiet, as markets wake up to a pretty sizable news in HealthCare. Aetna (AET) is buying Coventry Health Care for $5.7 billion, which comes out to $42.08 per share. The WSJ reports the deal will be 65% cash and 35% stock.
The macro uptrend built since June 4th remains firmly intact. The accelerated uptrend that ignited August 3rd got another push on August 16th and is now approaching the highs of the year set in early April at 1422. I will monitor this more recent move a bit closer, since I do try and navigate shorter term ranges. I will isolate some type of opportunity “if” this shorter term trend breaks for some cute tactical action. I will try and keep the community from fighting this upside trend, but I also don’t want people falling asleep behind the wheel.
Lots of action across the board:
Apple (NASDAQ:AAPL) has been the” go-to” vehicle since earnings. The stock has rewarded equity investors on all time frames. In this most recent run we’ve isolated various tight entries. The last strategy was Friday as it took out and closed above the 52-week highs of $644. The “Good book” said to continue to own as a macro/swing/momentum trade. It’s opening above $650. I will sell those shares in my cash flow account, and stay with my swing position as long as it stays above $644. Stock looks good for $700+ at some point this year.
Google (NASDAQ:GOOG) has seen very exciting action here as the stock finally got going again after this quarter’s earnings. Those not involved had a few price points to buy outlined in our Off the Charts newsletter. $620 was the first one than $650ish. It’s now on its way, it seems, to $700+, and perhaps historic highs above $747. Weekly/Monthly charts look awesome.
Amazon (NASDAQ:AMZN) has been decent, holding $235-$238 would help momentum guys stay involved.
Baidu (NASDAQ:BIDU) continues to stair step higher; $115 and $125 were the spots to buy.
eBay (NASDAQ:EBAY), SanDisk (NASDAQ:SNDK), and Quallcom (NASDAQ:QCOM) continue to act well.
The Retail Sector (RTH) is helping to lead the market higher.
Target (NYSE:TGT), Wal-Mart (WMT), Costco (NASDAQ:COST) and Home Depot (NYSE:HD) have been nice trades/investments.
The Gap (NYSE:GPS) is at 52 weeks highs. Ross Stores (NASDAQ:ROST) was strong Friday and upgraded today. Under Armour (UA) is also near highs. Lululemon (NASDAQ:LULU) has been a nice lower level cash flow trade.
Casinos provided some opportunity off lows:
Wynn Resorts (NASDAQ:WYNN), above $101.20 was the pivot.
Las Vegas Sands (NYSE:LVS) capitulated on July 26 then gave a nice follow on buy August 16-17. Now it can use a rest.
MGM Resorts (NYSE:MGM), also a cheapie, could see $11+.
Ags became a 3rd quarter focus with leaders like CF Industries (NYSE:CF), Monsanto (NYSE:MON), and Agrium (NYSE:AGU) performing well. Even Mosaic (NYSE:MOS) and PotashCorp (NYSE:POT) had committed moves off the lows.
Banks are slow but moving up a bit.
Oil Service Sector ETF (OIH) gapped up on June 29 and since has seen commitment with multiple lower level entries. Components Schlumberger (NYSE:SLB), Halliburton (NYSE:HAL), Exxon (NYSE:XOM), and Chevron (NYSE:CVX) are some of my favorite vehicles.
Gold (NYSEARCA:GLD) and Silver (NYSEARCA:SLV) are very tight, worth watching in the next week or so. This has been a frustrating spot if you focus here alone. GLD must get above $157-$158 and not look back to change character. The level for SLV is $27.45-27.55.
I’m sure I’ve left out multiple stocks and areas, but it’s a Monday morning in late August. Stay on your toes. I have one foot in the door, and one out.
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 Invest.
*DISCLOSURES: Scott Redler is long NASDAQ:AAPL, NYSE:POT, NYSE:LVS, NYSE:MGM, NYSE:GE, NYSEARCA:SLV. Short NYSEARCA:SPY