Market Tries to Contain Pull-Back as Earnings Season Rumbles On

World markets tried to bounce back overnight after yesterday’s losses. Europe is up small and Asia is mixed as some higher levels held.

S&P futures are up 6-8 handles after a down day yesterday. We did hold above the 8-day moving average, putting in a new pivot low at 1740ish. The longer we hold above this area the higher the probability this rally continues. Pivot resistance stands at 1759.

There’s still a lot going on during earnings season as stock selection gets even more important.

In today’s Morning Call we will go over the metals that are trying to act better and stay relevant as it seems that Fed could keep QE pace of purchase the same until March.

GLD broke above the downtrend resistance that was in control for almost two months with a gap up on October 17th. The ETF has been acting better since as it had another nice move up on Tuesday. Holding above $127-128 could confirm the validity of this rally. Next resistance stands at $133ish. The short-term pivot is $129.88.

The Gold Miners ETF (GDX) has also enjoyed a nice rally since October 15th lows. The ETF reclaimed the support of the 8- and 21-day EMAs recently. Holding above $24.50ish would be healthy for higher prices. The ETF needs to get and stay above $26.12 to get more upside.

Silver (SLV) has also been turning around a bit since October 15th. The ETF just reclaimed its 100-day EMA on Tuesday. It gets more compelling the longer it holds above $22.

High beta tech continues to provide opportunities.

Google (GOOG) gave us another nice entry yesterday as it showed relative strength mid-day and then triggered at $1019. Now it’s at $1035 and still acts well.

Apple (AAPL) has been acting much better. They couldn’t sell it down on “event day” and then it showed relative strength yesterday. It could continue above $528.50ish. Earnings are next Monday.

Amazon (AMZN) continues to build an upper flag to digest its big move on October 18th. It’s holding above the breakout level of $322, showing commitment to the upside. AMZN is reporting earnings after the close today so be cautious when you trade this name.

Baidu (BIDU) got a bit beat up with other Chinese names. Holding above $150ish would keep it in the game. BIDU also still has earnings to deal with.

Priceline (PCLN) had two down days but held the 8-day at $1056. See if that continues.

Netflix (NFLX) bounced back a bit yesterday after getting sold off since earnings. See if the bounce continues through $335ish. If the bears want to stay in control here, they probably want to contain a bounce into $345ish.

Facebook (FB) provided us with a decent short opportunity as it was very overbought. Yesterday it did hold above the 21-day EMA and the prior breakout area around $51. See if it can build a base above $51.30.

LinkedIn (LNKD) is still trying to build a big channel, but it was weaker In the morning yesterday before finding some support at 235ish. LNKD still needs time to build as earnings will help decide which way this goes in a week or so.

Tesla (TSLA) saw its composure change when it held below the 21-day EMA for multiple days for the first time this year. Yesterday it gave up the 50-day EMA. Speed and complexion always change at some point in momentum names. Yesterday’s low to trade against is $160.15. The 100-day EMA is at $145ish.

Railroads had a big day yesterday. Money continued to flow into the Utilities (XLU) and Homebuilders (XHB) as rates fall – see if that continues. Banks feel a bit lethargic still.

I would have thought this market would have tried to at least test the prior breakout high of SPX 1729ish before new highs, but the market is the market. Stay more stock specific.

Disclosure: Scott Redler is long AAPL, FB, XHB, GOOG calls. Short SPY

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