All Eyes on Germany, Fed and Apple (AAPL)

Markets broke out from a big Cup and Handle Pattern last week, finally clearing the upper level consolidation. Thursday’s action sent the market back in motion as it set new multi year highs, and then Friday the market digested with a positive tone despite weak jobs data.

Leading stocks showed, and we got solid leadership from leading sectors as well–Homebuilders (XHB), Retail (RTH), Consumer Discretionary (XLY) and Tech (QQQ). Even laggard type sectors–Financials (XLF), Agribusiness (MOO), Oil Service (OIH) and Energy (XLE)–showed some power and played some catch-up.

This week all eyes will be on Germany’s vote on Wednesday, then Big Ben on Thursday. Most headlines read that Europe is heading into a “dangerous week.” I thought that was last week, and the week before, and the week before that? Anyway, we can’t expect the same type of action like we saw last week, but an inside week will be nice. Some digestion and some work above the prior resistance point of 1422-1426, that should now act like Support, would be constructive.

CNBC’S Patti Domm included some of our technical insights on her Market Insider blog, found on page three of this link.

TECH

The three amigo’s that we’ve been focusing on have been very impressive: Apple (AAPL), Google (GOOG) and Amazon (AMZN). A new younger friend is trying to “Link In” as well!

Google (GOOG) broke out again above $688 and powered through $700. It can use a rest but is on its way to historic highs of $747.

Amazon (AMZN) had its product announcement last week and the Bears had no power trying to “sell the event”. The stock blasted off, rewarding investors who stock pick and traders who don’t fight trends. The buy area was $230 then $242 and lastly around $250. It’s hard to chase it up here.

Apple (AAPL) has it’s big event on Wednesday. The stock has been very impressive as it’s had multiple buy areas. It’s hanging around $680. The question for traders is: can it get some momentum before the iPhone 5 announcement and head to $690-$700 – or will it wait until after? Investors don’t really care as they’ve enjoyed a very profitable ride.

LinkedIn (LNKD) rewarded some speculative investors and technical traders last week. The stock hit $120 plus and could use a rest. It’s becoming more trusted and reliable.

eBay (EBAY) is not as fast but continues higher.

The PC group has not been the place to be as it’s all about handheld/mobile these days. We saw bad reports out of Dell (DELL), Hewlett-Packard (HPQ) and some started to fear Intel (INTC) could be in trouble. INTC pre-announced earnings Friday and acted fair at best. I think it’s an avoid, but worth watching for market composure. See if Intel can hold Friday’s low of $24.01.

Metals were EXTREMELY impressive last week as they extended higher. They have been a focus in our Off the Charts newsletter since August 20, and have moved well. With world Central Banks set to begin the next phase of quantitative easing, there is strong justification to own Gold (GLD) and Silver (SLV).

From a technical perspective, on August 20-21 we finally saw metals ignite and continue. The move was fast and tradable. At this point I sold my GLD Friday, but it can go higher with silver. I will look to re-enter if we get some big digestion. The fast speed of this rally can continue if GLD holds above the $165-166.

Banks started their intermediate moves last Wednesday as Goldman Sachs (GS) showed strong relative strength as it broke above recent range. We focused on JPM above $37.40 and it started its two day move. Bank of America (BAC) also jumped. Some were very happy with the Call Spread we talked about on Bloomberg in late August (Redler: Banks Poised to Move in Fourth-Quarter: Video – Bloomberg). We targeted the December $8 call spread—and that is working well. Wells Fargo (WFC) is at highs of the year.

The ags and the refiners had a spirited move to start the third Quarter and continued well.

CF MON AGU MOS – the ones we focus on – PPT and Off the charts.

XOM two big powerful days with CVX

Some others EOG HAL SLB PXD – not leading but some trades.

Casino’s rolling along.

LVS capitulated on 7/26 and then gave us 4 more trades- last one was around $42

MGM and WYNN are fair.

There is a lot to like as the EQUITY MARKETS ARE FAR FROM DEAD… I still have bear claws all over me as I tried to stay constructive on the markets though out the Summer…..

My 4th quarter target of 1450-1470 might be conservative.

I’m in the camp that we see 1700 by 2015—Not the 1000 mark the Bears are growling about.

Trade-em and Trail em—has been the mantra!

Disclosure: Scott J, Redler is Long AAPL JPM BAC FB MCP, Short SPY – Short GS

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