Digestion Is Healthy Following Major Dow, S&P Moves

The weekend was pretty quiet as most newspapers had lots of headlines written about the recent rally. It seems like the tone is still skeptical. No one’s doing any victory laps, and that’s a pretty good sign it could continue.

Today, futures are off small, as we could use a few days of digestion up here in order to make an assault on S&P historic highs.

Last week, “scenario #3” triggered, a break and close above SPX $1530 helped move it to a high of $1552 on Friday, helped by the February jobs report. Some work above $1538-$1542 would be good to let some moving averages play catch up.

I did post a longer-term chart, showing the Roaring ’80s, the Go–Go ’90s, and then the ’00s, the Decade of Consolidation. Now the S&P is closing in on the double top zone, which could bring out some sellers or create a pause, but overall I do think we could take it out on my road to S&P 1700.

There’s lots of rotation and lots of nice set-ups continue to present opportunities on all time frames.
Banks had their stress test, and some fared better than others.

Goldman Sachs (NYSE:GS) was weaker on Friday. See how it handles the next few sessions. As long as it stays above $150ish, I think it can go again.

Morgan Stanley (NYSE:MS) also was on the weaker side, which it often is, holding above $22.50 could keep it in the game.

Citigroup (NYSE:C) was viewed as a standout – it’s been acting much better in recent months. It was upgraded today, and that’s hard to chase here. It’s funny, the “glass half-empty” crowd will say it’s only $4.60, while those who are more opportunistic will say you could have all you wanted at $1.

Bank of America (NYSE:BAC) has seen a spirited move from $11 to back above $12, and with some time it could see highs again. I would like to accumulate this into $11.75-$11.85.

Tech has been a mixed bag.

Google (NASDAQ:GOOG), the best in breed, is taking a bit of a rest here. It put in a pivot of $825 on Friday. You could trade against that level moving forward.

Amazon (NASDAQ:AMZN) is flagging and could get going for another trade above $275.50-$276.50.

LinkedIn (NYSE:LNKD) also hangs in very well. The stock took a few days off and held the 8-day moving average around $174. It could get some attention getting and staying above $177.50.

Salesforce (NYSE:CRM) had a nice move after earnings. It just let the 8-day catch up. Above $186.50, there could be another trade.

Facebook (NASDAQ:FB) stalled a bit Friday. I’d like to see this hold $27.30-$27.50 and then act better if it can take out and close above $28.70.

Zynga (NASDAQ:ZNGA) actually looks like you can continue to stay with the “trash for treasure” trade, if it can clear $3.70 with some volume.

Sprint (NYSE:S) looks decent if it can get above $5.95 with some volume.

Yahoo! (NASDAQ:YHOO) took a few days off after a nice run from $21.45, and looks almost ready to get attention again.

Visa (NYSE:V) and Mastercard (NYSE:MA) still look good, they look ready to potentially break into new highs again.

Celgene (NASDAQ:CELG) had a nice move above $100-$103 – time to trim a bit.

Apple (NASDAQ:AAPL) stock has had some crucial points to measure during this big decline. It’s still trapped in a major downtrend, showing no commitment during this decline as it has blown through every moving average, then used those as resistance. We now have some support at $420 and a descending trend line that now stands around $435-$437. If we can get some huge volume through  that area- maybe we get a trade there. If not, potentially look out below.

Treasury Proshares (ETF:TBT) had a nice move last week. Those with a higher TBT and lower TLT got rewarded last week. This could continue, although it’s choppy.

Metals are hanging by a thread above macro support.

The new support for Gold (ETF:GLD) is now $150.80-$151.40. In order to get away from this zone, it will need a volume move above $153.60.

I entered Friday with 11 longs and left with only 3. I will see how we digest the next few sessions and try and put some back on based on the action.

Disclosure: Scott J. Redler is Long: FB, SLB, BAC. Short: SPY

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