Yesterday the market shrugged off a disconcerting three-hour outage of the Nasdaq exchange to finish the day with healthy gains. The Nasdaq, in fact, was the strongest index, gaining 1.08% while the S&P finished up 0.86% and the Dow up 0.44%. This morning, world markets are mixed and US futures have crawled back into narrowly positive territory.
Wednesday’s Fed minutes really provided no clues on when the Fed might begin tapering QE, although the market appears to be pricing in a September taper. Bond yields continue to rise and put pressure on stocks. The S&P has rallied back to its 50-day moving average and paused at that level. Will the 50-day act as resistance or can the S&P reclaim the level?
Yesterday’s bounce was important for the market to find its footing, but it still has a lot left to prove. All eyes this weekend will be on Jackson Hole, where a group of Fed governors and world policy makers will gather for a meeting of the minds. The summit is getting slightly less attention this year due to the absence of Fed Chairman Ben Bernanke and other world thought leaders. However, with Janet Yellen taking more of a leadership role it could be a sign of things to come.
The SPY inside range has support at $165.50 then $164.89 (yesterday’s gap) and the pivot low of $164.19. If we trade and get a close above $166.30 it could open the door for $167.40ish.
Facebook (FB) has continued its strong bounce off the $36 level, which was highlighted in our Off the Charts newsletter. If FB continues to hold above $37.20-37.50, it would keep the recent upward momentum intact.
MGM Resorts International (MGM) broke out yesterday and closed on highs after we listed it in last night’s newsletter. The stock has been in a 70 cent consolidation range, making the measured move of this play up to $18.35.
Amazon (AMZN) has been trading in a right range for the past two weeks and you could get a trade in either direction depending on how it breaks out of the channel. Yesterday the stock saw a powerful surge off support at $282-283 as it powered to the top end of the range. This stock could see follow-through above yesterday’s high of $289.87.
Apple (AAPL) got another tweet boost from Carl Icahn yesterday, who is running the risk of watering down the impact of his social media exploits. This time around, AAPL didn’t budge much after the Nasdaq re-opened, and still feels a little bit lethargic after a long run.
Tesla (TSLA) has been a rock star for a long time, but re-ignited again most recently thanks to a stellar 5-star crash safety rating. The stock could challenge highs above $158.88 in the coming sessions.
Overall, many traders will choose to sit out today’s action as we head into the last week of Summer. Volume could be very light today, and it’s best to keep risk down.
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