World markets were generally quiet overnight as Europe is down a bit, ignoring some upbeat data, while the Nikkei shrugs off a 6.9 magnitude earthquake near Tokyo to finish marginally positive.
US stock futures are basically flat after yesterday’s gap fade. The big gap up was sold after President Obama appeared to gain from support from key congressional leaders on both sides of the aisle for a potential strike on Syria. The G20 Summit also starts tomorrow, which could also produce some headlines to whip the market around. The market would definitely like if Russia backed off its sharp support of the Syrian regime.
This lower S&P pivot is still intact but feels vulnerable. Market did have a lot of reasons to go up yesterday and couldn’t hold gains. We have some support at 1633, but the real “line in the sand pivot” now stands at 1627. A close below this and the Bears will start growling for a test of the June lows and the 200-day that stands around 1560ish. In order to get the market out of harm;s way we probably need a close above 1665-1670. There is the potential that this is a “Right Shoulder” building, but we need some more evidence to confirm this.
In today’s Morning Call the sector spotlight will be on the banks that tried to show some relative strength yesterday for a change.
The Financial Sector ETF (XLF) managed to close back above its 100-day MA at $19.68. It has entered the gap from August 27th which gets filled at $19.93. A break above yesterday’s high of $19.78 could lead to the gap fill. After that, next resistance stands at the 50-day at $20.11. Key support is now $19.35.
Goldman Sachs (GS) had a nice gap up and managed to hold a decent portion of it. Use the $153.80ish level as the new point of reference to trade against. The longer it holds above yesterday’s gap, the higher the probability we could see higher prices in the coming sessions.
Bank of America (BAC) gained almost 1% after finding support along its 50-day last week. Look for potential continuation above yesterday’s high of $14.38. BAC has been showing lots of relative strength among the banks. It continues to hold the $14 area.
Citigroup (C) posted solid gains of 2.15% yesterday. The stock is trying to regain the support of its 100-day moving average. A break and close above $49.70 could open the door for higher prices. New key pivot support is now $47.64.
We will also go over continued opportunities in the Casino names.
Las Vegas Sands (LVS) gained almost 3% yesterday to close at the key resistance level of $58 from August 6th. A break and close above this level could open the door for a move back to highs at $60.54. LVS has regained the support of all key moving averages. It has worked its way back to the “go-to list.”
MGM Resoirts (MGM) also had decent gains of 1.6% to close above its 8-day moving average. The stock has a tight set-up, and a break above yesterday’s high of $18 could take us back to retest the prior pivot high of $18.54 as this is the next short-term resistance. MGM also has a good looking macro chart with all key moving averages curling up. This has been a focus of ours for most of 2013, and I still think it could get above $20 in 2014.
Wynn Resorts (WYNN) is a bit trickier with its intra-day action as yesterday it put in a long topping tail. Overall, the daily chart looks good as it’s trading above all key moving averages, showing relative strength. Look for potential continuation above yesterday’s high of $143.88. Next resistance stands at $146
High beta continues to provided mixed opportunities.
Apple (AAPL) closed near the lows after a strong early move. It might try again now that they also sent out a new invite for a September 11th event in China. It needs to hold $486ish otherwise it could lose some momentum. A close above $497 could get some momentum back here.
Google (GOOG) woke up yesterday and needs to hold $855ish to build on it. If not, I’d still be careful here.
Amazon (AMZN), after showing relative since the post-earnings breakout failure, finally had a “potent” up day – sort of a “Day 1.” For it to stay interesting, it needs to hold above $285ish.
Netflix (NFLX) didn’t have enough juice yesterday to extend its breakout. If it can get above $290.71 some traders could regain interest for potential cash flow.
LinkedIn (LNKD) closed well yesterday and then announced a follow-on offering that pushed it down after hours. I think it could be buyable at $240ish and then at some support around $235ish.
Facebook (FB) continues to act very well after many tradable pivots. The next spot for momentum action is $42.26.
Metals found some support and but are a little softer this morning.
For Gold (GLD) the pivot support to trade against is $134.45. Silver (SLV) is in yesterday’s gap pre-market. Pivot support is $22.55.
The 2x Inverse Bond ETF (TBT) found some footing at the 50-day. Recent pivot support is $75.75.
I really don’t have “conviction” in this spot, so I will continue to be tactical until see a few more days of trading.
Disclosure: Scott Redler is flat