Digestion Would be Healthy After Yesterday’s Move

Markets opened up a bit this morning and have been relatively quiet. After yesterday’s big move a digestion/muted day makes sense.

The S&P hit 1399 and has pulled back a touch. If the market wants to pull in and probe some of yesterday’s gains, SPY support stands at around $139.80 (this is a shallow spot). Bigger support from yesterday afternoon stands at $139.40-139.60. I will cover some of my SPY here (if we get here).

Banks are digesting yesterday’s move well, but Goldman Sachs (GS) might be a problem.

GS, Op-Ed from the former upper-level employee is weighing a bit on the stock. Some are trying to buy this dip and I would use morning low as a stop, $120.77. Watch this, if it gets a lot worse it could pressure the banks and futures.

Citigroup (C) was downgraded and I do think it took it in stride. Holding a decent portion of yesterday’s gap would be constructive, but a move and close below $34.87 would take out some of the short term momentum.

Bank of America (BAC) had some nice follow through to yesterday’s additional momentum buy around $8.25. The stock hit $8.90 and backed off. Take trades here, I’m down to a third left.

JP Morgan (JPM) needs time. $42-42.40 would be a nice pull in to buy if we get it.

Tech

Apple (AAPL) is up big again. I sold my longs from overnight, it has a new range for the day. Tough play up here, watch for market direction. Remember quad witching is Friday, sometimes they pull run mid week or on Thursday to collect some of the premiums and have them go worth less as people chase the upside move.

Baidu (BIDU) didn’t work, I tried around $140 and got out.

Amazon (AMZN) is still in lower pivot, weaker today. I will continue to avoid, but it’s a bit more bearish than bullish.

International Business Machines (IBM) sold my last position in IBM today above $204.50, congrats to those that stayed the course.

VMWare (VMW) and Salesforce (CRM) need to digest yesterday’s move.

LinkedIn (LNKD) reached the $95 target. I still have a feeler, it should not break $89. If so, I’ll be done with it.

Dunkin Brands (DNKN) sold most before the open above $32.25. I have a trailer, will try and buy the dip.

Casinos are taking the day off after a nice snap back.

Wynn Resorts (WYNN), Las Vegas Sands (LVS) and MGM Resorts (MGM) all look good. I did buy some Caesar’s (CZR) as it perked up from the lower end of it’s IPO range. It could be worth a nice swing hold back to $15 area.

The Ultrashort 20+ Year Treasury ETF (TBT) had nice follow through here to the upside after closing above $19.70ish pivot yesterday. I did sell some, but it has room to $21.50-23 with time.

Gold (GLD) nice continuation/follow through to the downside for those that shorted on Fed’s weakness. It’s on lows. Next support spot is $158.01 then $154.55.

Disclosure: Scott Redler is long CZR, BAC, LNKD, DNKN, TBT. Short TGT, SPY. Traded but flat WMT, LVS, IBM, AAPL, BIDU.

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