Morning Call: Keep It Light during Earnings and Fed Talk

Futures are up 4-7 handles ahead of Big Ben’s testimony before Congress today and tomorrow. Yesterday was a somewhat constructive but typical inside day after Friday’s big move. The news rolling in continues to be negative, but the market doesn’t seem to care.


Investors seem more enamored with what the Fed will do! Will they take action on August 1st or September 13th?  Interestingly, the consensus seems to be not if but when. The consensus also seems to be that any Fed action will be more than “Twist,” so if there isn’t more than a twist, or no action for August, we need to watch for market disappointment.

I’ve seen some blogs claiming that we are about a week away from a “Tremendous Slide.” Some chartists are pointing out the similarities to last year when the market unraveled very quickly. SocGen is pointing out the “ultimate Death Cross,” where the 50-month moving average falls below the 200-month average. I wouldn’t try to anticipate this. Just don’t fall asleep behind the wheel if the complexion changes quickly. I will be on the look out! Use high level stops and low level stops in order to protect gains and act fast!

The SPY is opening around $135.89. Use this as a pivot.  Above that, the next resistance is at $136.23  and then a major level at $137.51. If we open up and start to trade below this pivot, make sure you don’t get caught in a day like we saw on July 10th.

Earnings season starts to kick in to another gear

Corporate Events Calendar – Week of Mon Jul 16

·         Tues Jul 17: earnings before the open (AMTD, CMA, GS, HST, JNJ, KO, KSU, MAT, MOS, MTB, OMC, STT); earnings after the close (CSX, FIS, INTC, YHOO); trading updates (Rio Tinto)

·         Wed Jul 18: earnings before the open (ABT, APH, ASML, BAC, BK, BLK, CHKP, DOV, ERIC, GWW, HON, NTRS, PNC, STJ, SWK, USB); earnings after the close (AXP, EBAY, FFIV, IBM, PLXS, QCOM, SLM, SWKS, SYK, XLNX, YUM); trading updates (BHP, Land Securities, LSE); analyst meetings (PAYX)

·         Thurs Jul 19: earnings before the open (ADS, Akzo Nobel, ARB, BAX, BBT, BX, CY, DHR, DO, Electrolux, FCS, FCX, FITB, HBAN, KEY, LUV, MS, NOK, NUE, PM, PPG, Sandvik, SHW, SWY, TCB, TRV, TSM, TXT, UNH, UNP, VFC, VZ); earnings after the close (AMD, ASBC, CMG, COF, CYN, ETFC, FSL, GOOG, ISRG, MSFT, SNDK); trading updates/sales reports (Alstom, Hermes)

·         Fri Jul 20: earnings before the open (BHI, FHN, GE, IR, MAN, SLB, STI, VOD, XRX)

Also, a reminder that the Eurozone finance ministers will have another meeting on Friday July 20th.   Spain is the main topic, but I’m sure Italy will come up as well.

I’m keeping it light and just tactically looking for cash flow.  I’m in no rush for a portfolio approach.

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 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.

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*DISCLOSURES: Scott Redler is long August (NYSEARCA:SPY) puts.

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