Google (GOOG) Cement New Tech Order as Apple (AAPL) Fills Long-term Gap

The market spent the morning in negative territory Monday but staged an afternoon bounce to close back within a stone’s throw away from pivot highs. Last Monday, the market was plunged into turmoil by surprising Italian elections and fears about the looming sequester, but stocks have been able to shrug off that harsh intraday sell-off. The S&P closed today right back at those highs from last Monday, up 0.46%, and looks poised to potentially resume the 2013 grind higher.

Stocks that have been leading the market this year continue to do so today, with recent favorites Google (NASDAQ:GOOG) and LinkedIn (NASDAQ:LNKD) making new highs once again. GOOG finished up 1.85% while LNKD surged an impressive 4.36%. While it’s difficult to initiate new long positions in either stock at these levels, it’s very healthy to see high-profile stocks making all-time highs.

There are also several stocks from my 2013 predictions that are acting well. Yahoo! (NASDAQ:YHOO) in particular continues to extend higher as investors cheer the early work of new CEO Marissa Mayer. Mayer, a former Google exec credited with the search engine’s clean homepage trademark, courted controversy in her decree last week that all Yahoo! employees work in a headquarter office, rather than remotely. Her logic? VPN data showed that perhaps the company’s employees were not being as productive as they suggested. All that aside, YHOO was up another 3.46% today.

Facebook (NASDAQ:FB) enjoyed a strong start to 2013, hitting our targets quickly after breaking out of a perfect cup and handle pattern. After a pull-back following earnings, FB looks like it could be setting up another cup and handle pattern–this time on the weekly chart. Keep an eye on the current descending channel for a potential trigger.

From a sector analysis perspective, there are a few conflicting signals right now. Dow theorists say when Transports (NYSE:IYT) lead Industrials (NYSE:XLI) higher in a bull market, it’s a sign of impending economic growth and additional upside in the stock market. However, on a shorter time frame right now you are seeing defensive sectors like Utilities (NYSE:XLU) and Consumer Staples (NYSE:XLP) lead the market, which is more of a risk-off signal. What does that tell me? The macro trend remains to the upside, but we could be due for some rest or corrective action in the more immediate future.

A stock specific approach remains best in this environment, as you don’t need to make sense of the short-term gyrations in the indices to identify the most bullish chart patterns.

Disclosure: Scott Redler is long MSFT, GS, F, FB, BAC, EBAY, ZNGA, WFC, NKE, WMT. Short SPY

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About Scott Redler 367 Articles

Scott Redler is the Chief Strategic Officer of T3 Live. He develops all trading strategies for the service and acts as the face of T3 Live. Mr. Redler focuses on thorough preparation and discipline as a trader.

Mr. Redler has been trading equities for more than 10 years and has more recently received widespread recognition from the financial community for his insightful, pragmatic approach. He began his career as a broker and venture capitalist where he was able to facilitate relationships that led him into trading. Beginning his trading career at Broadway Trading in 1999, Mr. Redler moved on with Marc Sperling to Sperling Enterprises, LLC after establishing himself as one of the best young traders in the firm. As a manager at Sperling Enterprises, continued to trade actively while working closely with all traders in the firm to dramatically increase performance.

Mr. Redler has participated in more than 30 triathlons and one IronMan, exhibiting a work ethic that also defines his trading. His vast knowledge and meticulous attention to detail has led to regular appearances on CNBC, Fox Business, Bloomberg, and he is a regular contributor to Minyanville and Forbes’ Intelligent Investing blog. He has been quoted in the Wall Street Journal and Investor's Business Daily, among other publications.

Scott received a B.B.A. in Marketing/Finance from the State University of New York at Albany, graduating Magna Cum Laude from Albany's School of Business.

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