Morning Call: Market Remains Choppy Around 21-Day MA

US stock futures are currently around the flat line as the action remains choppy. Markets have been running in place over the past week, with the S&P hovering around the 21-day moving average. Economic data will be in focus today with the ADP employment report at 8:15 ET and ISM survey of business confidence at 10. Yesterday the ISM manufacturing survey showed a resumption of growth, and triggered a morning move higher. (The ADP report this morning came in better than expected, showing 162,000 new jobs created).


Apple (NASDAQ:AAPL) remains volatile and will be firmly on traders’ radars today. The stock topped out above $700 a share after the unveiling of the iPhone 5, but lackluster first weekend sales triggered a drop in the stock. AAPL lost its 21-day moving average last week, and retested it with a Red Dog Reversal on Thursday, but yesterday finally got the move down into the 50-day moving average that we had been looking for. After kissing that MA yesterday, dip buyers now have a defined level to trade against. Apple suppliers have reportedly began production on parts for a smaller tablet that will likely compete with the lower-cost, smaller tablets from the likes of Amazon (NASDAQ:AMZN), Samsung, and others.

The precious metals continue to hold up well one world central bank after another introduces new monetary policy. Gold (NYSE:GLD) dipped below its 8-day moving average for a day last week but quickly climbed back above it, and Silver (NYSE:SLV) also remains above its 8-day MA. The metals are in a tight upper level consolidation and will likely yield a trade if they break above or below key resistance or support.

MetroPCS (NYSE:PCS) is slightly higher overnight after yesterday’s 17.8% move higher that came as a result of a leaked M&A deal. T-Mobile is in late-stage talks to acquire the cellular company, a move that would short up two struggling providers. The deal is much less likely to encounter regulatory concerns that stopped the much bigger AT&T (NYSE:T) for T-Mobile deal in its tracks last year.

As we have been harping on in our Off the Charts newsletter, this choppy action is not conducive for successful active trading. Stick to a very stock selective plan and do not make big bets in either direction until we get more definitive clues about what direction the next leg of the market will be.

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.

Scott is currently the Chief Strategic Officer of T3 Live and is a Registered Associated Person of T3 Trading Group, LLC.

*DISCLOSURES: Scott Redler is long AAPL, FB. Short SPY.

Leave a Reply

Your email address will not be published. Required fields are marked *