Market Rests as Fed Meeting Begins

World markets are again mixed as Europe gives back about a third of yesterday’s gains and Asia is mostly higher with the Nikkei leading the way, up 0.8%. S&P futures are flattish as we head into the Fed two-day meeting.

Yesterday the markets bounced back pretty well but most of the gains came pre-market an the move lacked some power. It’s hard to make big bets before Wednesday’s Fed news.

Goldman says they don’t expect a taper in December, and that seems to be the popular opinion. Most expect tapering to begin in March, but I think communication of that in tomorrow’s announcement would be healthy.

As of now we have a floor to trade against from last week at S&P 1772 with a gap that starts from yesterday at 1784. We have some resistance at 1792 then 1803. If the sellers want some hopes of lower prices, they probably don’t want the bulls to reclaim that area.

Lots of mixed action across the board, which helps us identify opportunities based on relative strength.

Casinos continue to show leadership and present opportunities.

MGM Resorts (MGM) had great follow-through after its breakout move to new highs on Friday as the stock tacked on another 2.4% yesterday. Holding above the breakout level of $21 would be constructive for higher prices moving forward.

Las Vegas Sands (LVS) is hovering at highs and looks poised to potentially get a break out above $77.91 as the stock has been holding above its 8-day EMA showing relative strength. Keep an eye on this name as it could get some upside momentum after MGM’s potent move yesterday.

Wynn (WYNN) also made a new high at $185.41 after a few days of rest. However the stock pulled all the way back to close on lows. A better spot to be able to buy prudently would be $178.50-179 where the 8-day EMA plays catch-up.

Solars caught a bid at lower levels.

Canadian Solar (CSIQ) caught a bid yesterday to log a 5.2% gain and reclaim its 8- and 21-day EMAs. It closed on highs and showed relative strength. Look for potential continuation above yesterday’s high of $29.26. Next resistance comes in at $31.

Sun Power (SPWR) is retesting its 100-day EMA at $27.15. The longer it holds above this key moving average, the higher the probability it could get some attention at this lower level.

Solar City (SCTY) is still hovering around its 8- and 21-day EMA. A break and close above Friday’s high of $54 could set it back in motion.

Some other names for action:

Apple (AAPL) had a small bounce after a three-day pull back but gave back most of its intra-day gains to close on lows at $557.50. It needs to break and close above the two-day resistance of $562.88 to get back in motion.

Tesla (TSLA) held most of its gains from Thursday’s potent break out last week, but didn’t find much traction above $151.80. See if it could see some buyers after two days of rest. Use yesterday’s low of $146.10 as the new point of reference.

Groupon (GRPN) had a nice bounce last week to get back above its 8- and 21-day EMAs. The stock has been flagging nicely above its 8-day since. A move through $10.62 on good volume could lead to the next rally.

Twitter (TWTR) had a Red Dog Reversal at $59.41 to retrace 4% off of highs yesterday. It could see some down side follow-through today if it trades below $55.76. Some bigger support comes in around $52.50-54.00.

Facebook (FB) stalled at prior highs, but as long as it stays above $52.50ish for a bit, perhaps it could make another attempt to take out $54.81, then all-time highs once again. Upgrade this morning is helping.

Goldman Sachs (GS) closed above $170 for the first time. It could see some more upside if it can trade through $171.49.

THe 2x Inverse Treasury Bond ETF (TBT) looks like it could be ready to take out $80 once again if the Fed drops a strong hint about QE tapering in Q1 2014.

Disclosure: Scott Redler is long SPY, GS, BAC, CSIQ, GRPN. Short TWTR.

About Scott Redler 367 Articles

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.

Mr. 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, Mr. Redler 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, continued to trade actively while working closely with all traders in the firm to dramatically increase performance.

Mr. Redler has participated in more than 30 triathlons and one IronMan, 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, Bloomberg, and he is a regular contributor to Minyanville and Forbes’ Intelligent Investing blog. He has been quoted in the Wall Street Journal and Investor's Business Daily, among other publications.

Scott received a B.B.A. in Marketing/Finance from the State University of New York at Albany, graduating Magna Cum Laude from Albany's School of Business.

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