Welcome to the second quarter! As I enter, this new three month period, I do it with my foot off the throttle. Those in cruise control riding the recent uptrend have been rewarded. Right now it could be time to have your hand on the stick and foot on the clutch and just “be ready” to switch some gears. So far, markets have only given intermediate trend riders a small reason to take some caution. But Macro investors haven’t had to break a sweat. Riding 10-12 positions for most of Quarter #1 was the way to navigate. Quarter#2 needs to prove it’s personality!
Lots of chatter all night long about China PMI- which has been now billed as mixed with a 53.1 reading from March vs. 51 from February. We have our own National PMI this morning. We need to Measure the next few days as we typically get new monthly flows with quarterly’s to boot. If market acts lethargic or it proves that Friday was for the weekend headlines, we might see some continuation to the “rally under pressure” that IBD put the big picture of this market in middle of last week. (Don’t jump to conclusions) The Trends are all intact!
Traders will be focusing on Whether we get a Hard or soft landing in China. A pullback or blow off top in Oil. The Chatter in Europe about Spain and Italy. Iranian and Israel tensions. Most importantly will be Earnings that start in the next Week or so. What will guidance be like and are the gains priced in. A pull back before earnings would be nice so they don’t just “sell the news” But we shall see. I’m sure it will be very “Stock Specific”
The Inside Micro Range in the SPX stands.
Micro Support is 1401— Micro resistance is 1410
Thursday’s low and the 20day stands at 1391** The recent pivot highs are 1419
Use the above points of reference has a short term road map
Bigger Support is 1371-1376- and more macro resistance stands at 1440
AAPL – was a bit weaker Friday- so need to see if that continues- Some news today that the Ipad isn’t running as hot as some skeptics say.
In order to relieve short term pressure- Stock needs to close back above $605-$607. The longer it stays below, the higher the probability for a break or Friday’s low of $597.94 (a cute short)— A close below $595-$597 and we probably see a retest of the 20day in the $580 area. (buyable)
AMZN – Downgraded today and pointing lower. It closed on lows Friday after a nice move from the $186-$187 pivot buy. Some momentum guys probably getting paid on this down open. $195-197.40 would be a place to cover for short term guys. Also will be important to see how it treats that zone
GOOG – earned a well deserved rest. We talked mid week that from $620 to almost $660 is a lot. Watch Friday’s low as short term pivot- If it can hold above $628-$630 it would be healthy ( macro investors/and intermediate traders should look to buy this area)
NFLX – Stock went from $111 to almost $123.50 before a pull back. Stock needs to hold this $113-$114 area to stay constructive. It probably pulled back a bit more than short term trend watcher would have liked.
LNKD – Nice move from $95 to the target $105-$110 resistance zone. Give some time and it should go again. Holding 100 area would be constructive
VMW – downgraded after a super run from $102 pivot . I’d think buying back $108-$110 would be strategic
ZNGA – held price and was received well – be long vs. $12
CRB – GOLD AND SILVER Seem to be Carving out a Inverted Head and Shoulders Pattern. Those anticipating a Bigger move higher this year. This is a bullish pattern that needs time to Prove. I will have more on it Later.
GLD/Gold – Some bought this recent pivot low- or at least covered shorts. You can be in Tier one Gold/GLD and trade vs. $158-$160. This lower pivot needs to hold in order to keep Right Shoulder intact. It needs to get above and close above $165 in order to get some upside momentum
SLV/Silver- Very similar to above You can be long vs. Pivot low of $30.21 and needs to get and close above $32.18 to confirm this is on the move to the upside
Banks- seem like they are digestive mode and need time.
Casino’s a bit choppy and need a rest.
Congrats for those that stayed with CZR – two nice pivot buys- $11.25 then again at $13.30-$13.50 for a almost $15 close Friday- spoke about this a lot last week. I’m out for now- but I think this has a big future.
As I stated early- My foot is off throttle and sold most trailing longs into Friday’s up open. I will be day trading both long and short this week until I have more clarity.
Disclosure: Scott J, Redler is long ZNGA SLV