Global worries and headlines are back after a period of relative calm, and the market is reacting with some anxiety this morning. There are red arrows in markets around the world in response to the worries over Greece and Portugal, as well as the ongoing protests in Egypt that threaten to boil over into civil war.
Europe is down 1.5% + across the board, and Asian markets are also down as oil spikes above $100+. S&P futures so far are down 8-10 handles, which we haven’t seen in more than a week. Combine all of these factors with a low volume holiday-week tape and anticipation of Friday’s jobs report, and you have a recipe for some potential movement.
Technically the market has had trouble re-claiming the 50-day and the broken uptrend. We have seen multiple tails over the past week, and yesterday we got a bearish topping tail into the retest of the broken trend line from the June 20 break. I have been in short-term tactical mode due to the lack of intraday power after the gaps up, and yesterday’s topping tail reinforced my view. Weakness in the banks and homebuilders has also been a troubling sign.
There is now an “inside wedge” within the “bigger wedge.” Pre-market we are close to intermediate support around 1598-1601. A 30/60 minute or daily close below that level could bring out more sellers. After that, the 100-day moving average is 1584 with the June 24 pivot low at 1560. On the SPY, $159.80-$160.20 is a pretty big “action pivot area.”
Banks (XLF) and Homebuilders (XHB) gave us some clues to pare some risk down.
Goldman Sachs (GS) didn’t really bounce back much last week. A close below $148.71-$150 could bring in more sellers.
Morgan Stanley (MS) is also showing relative weakness. The $23.90-24.10 level is a big pivot.
XHB also doesn’t look so good. A break and close below $29.35 could lead things lower as well.
Tech is mixed but showing relative strength overall. Perhaps there could be some opportunities here today.
Apple (AAPL) just had a nice three-day move from Friday’s Red Dog Reversal at $393. I do think it was potent enough that it got some interested. See if it can go positive today. Overall, holding above $410ish could show some commitment for an overall move back towards $433-435.
Amazon (AMZN) didn’t have enough power to close at historic highs after flirting with it a few times yesterday. The stock needs to hold $278-$280 to try again if it wants to.
Google (GOOG) is lethargic around here. Make sure it continues to stay above the 50-day, which is $869.
Netflix (NFLX) needs to hold $216-218 to maintain its “go-to” status.
LinkedIn (LNKD) still looks good. See if it can hold $176-177.
Tesla (TSLA) gave us a nice move this week. The triggers were $110, then $114.90, and then it was prudent to sell the strength into historic highs yesterday as it hit $121ish. Now perhaps you could buy it back around $114-$116 for a trade today. It may need some time.
Metals are up a bit this morning. They seem like they could continue higher after last Thursday’s capitulation lows. Friday presented counter-trend opportunities. They are holding in.
Gold (GLD) needs to hold $119.78 to stay interesting. If it gets above $121.95, I believe it could see more upside.
Silver (SLV) needs to hold $18.59 to stay interesting. If it can get above $19.14, I believe it could go again.
Gold Miners (GDX) needs to stay above $23.46 to stay interesting. If it can get above $25.20, I believe it could go again.
There is a bit of a “flight to safety” today. I put on feeler of the TBT yesterday and I do feel like this $70.75-$71.25 could be worth a look.
Disclosure: Scott Redler is long SLV, TBT, AAPL. Short SPY.