Morning Call: China Growth Overshadows Europe Malaise, Market Awaits Bernanke Testimony

US stock futures point to a higher open on Wall St Wednesday, following an afternoon drop yesterday that ensured a 4th consecutive down day for the market. Indices grasped to hold their 50-day moving averages yesterday, but most leading stocks are still holding above their 10day or 20day moving averages. This tells me, you have to continue to take a slightly positive stance with this market. Buying select leading stocks as they pull in at key moving averages can still work, but with all the headlines going on most trades should be short rentals. I would not get overextended in a multiple positions with excessive size, but there are set ups that continue to work. Keep listening for headlines that tend to cause some minor gyrations. If minor becomes major, make sure you are in full control.


Support in the (NYSE:SPY) lies at $131.30 then $130.17, and the line in the sand at $129.60. Resistance is at $132.78 then $133.18, and a big one around $134.44. After a monster two week run followed by a sharp 4-day snapback, the market is due for some rest. Headlines continue to pour out of Europe, where Italy is the next of the PIIGS nations to look in dire need of a bailout package. The recovery from pre-market losses yesterday was the result of Italy going from down 4-5% to green, and it will be important to continue monitoring that situation. In the Fed minutes yesterday, we got the first hints about a possible QE3, and commodities reacted favorably.

TECH
Apple Inc. (NASDAQ:AAPL) got hit hard off the open and tested the descending channel and held tough. It tried to be strong mid-day and now it looks like a great set up that can be added to for momentum above $360. After that is the highs of the year at $364.90. My target for the year is $425.
Amazon.com Inc. (NASDAQ:AMZN) is still above all the upper moving averages and resting nicely for another move as this is a big time leader.
Netflix, Inc. (NASDAQ:NFLX) gave us an outside day on Monday and is trying to hold the upper flag. Watch $285-286 as important upper support. This needs to hold to keep shorts trapped.
Google, Inc. (NASDAQ:GOOG) held the upper level around $525.30 and seems to be acting better. Next resistance is around $547-550. Above that we should see $570
VMWare, Inc. (NYSE:VM) is trying to hold its 10-day moving average. If it comes in a bit more $97-98 should hold for it to remain strong.
salesforce.com, inc. (NYSE:CRM) is trying to hold its 10day and is giving us a quiet pull in. If this level doesn’t hold $145-$146 is a bigger area.

Baidu.com, Inc. (NASDAQ:BIDU) has been volatile, and broke its 10day but held the previous support around $137. This needs some time. If this level fails I think $132.50-$133 is big support.
SINA Corporation (NASDAQ:SINA) broke the 10day but still holds in well. See if this $105-106 holds. If it does and starts to get moving above $110 perhaps it goes after it’s longer term descending channel for a momentum long entry.

LinkedIn Corp (NASDAQ:LNKD) held the $97-98 level and acts well. Keep it on the radar.
Yandex NV (NASDAQ:YNDX) is very sloppy but trying to hold $33. It probably needs more time, but at some point down the road will clear $36 area with success.

Gold gave us a powerful move yesterday and its opening at new highs. Scott Redler stated in my 2011 predictions we will see $1700-$1800. Here are some appearances over the last two years on CNBC when Scott talked about gold.

http://www.youtube.com/watch?v=97XFMxc2m7c

http://video.cnbc.com/gallery/?video=979177412

Banks report earnings starting with JPM, let’s see if they can go up on bad numbers that seemed to be priced in.

Ags are acting okay, and commodity stocks in general should bounce with more talk of QE3. CF Industries Holdings Inc. (NYSE:CF) is the strongest fertilizer stock, and it had an impressive move yesterday early before pulling in. It looks to have formed a nice wedge pattern that I think will resolve itself higher.

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 AAPL

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