Italian short term yields continue to rise and Spain hasn’t been pretty, but stocks rose in Europe and Asia for the first time in five days. There is some speculation that China will inject stimulus in Europe, and some diminished hopes that the European Summit might actually accomplish something.
Futures are basically flat as commodities continue to be trapped in intermediate downtrends, which is especially frustrating the gold bugs out there.
SPX is holding the 1306-1309 area now that we’ve pulled in about 50 handles since Fed day last Wednesday. Short term resistance stands at 1324-1325, and bigger resistance stands at 1333-1337. If Bears want to keep the pressure on, they won’t let bulls take back that level. The 200-day moving average stands at 1297.
The Facebook Circus continues this morning as all the IPO underwriters are allowed to give their coverage. Goldman Sachs (GS) and JPMorgan (JPM) are the highest of the bunch with 12 month targets fo $42 to $45. The real trade for Facebook (FB), however, was after the Red Dog Reversal at $25.70 on June 6th, and then when it broke its downtrend and closed $28.10 on June 14th. Both of these buyable strategies are still time stamped on our blog and from the Morning Call. Today is probably the time to take your profits amidst all the Hoopla! Facebook is due a rest, but it should “re-set” and move higher again shortly.
Linkedin (LNKD) acts very well technically, even with a much lower valuation and metrics. The stock has been on the move, and there is another buyable pattern around $107.10 for continuation.
Zynga (ZNGA) probably can be thrown in the drawer with a stop at $5.50.
Various stocks are acting decently, as we’ve outlined below in Off the Charts, as they set up for macro holds or cash flow trades. Check out last night’s report.
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This is still a time to be tactical and avoid big bets. We have a lot of summer and headlines yet to deal with in coming weeks.
Disclosure: Scott Redler is long FB, AAPL, and LNKD and short SPY.
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