Is This Market in Need of a Breather?

There’s a bit of profit taking around the world as global markets have been up almost five days straight, on top of earlier significant moves. Some massive moves took place in Japan, China had a four-day move, and a steady move in Europe deserves a breather.

U.S. indices can use a breather as well. The SPX just went from 1582 to 1632 in five days and is almost up 100 handles since it tested its 50-day moving average on April 19.

The oscillator is almost 50, which means it is always a bit tricky to initiate new positions, but it doesn’t mean to blindly short.

The upper range in the SPY has micro-support at $162.70 and then $162.33, the 8-day MA, which we are very far extended from. The gap from Friday’s Jobs Report starts at $161.04. Pivot resistance is now $163.39.

So far each day the market hasn’t been able to create a Doji or Topping Tail pattern to lead to a breather. I guess if we see that, maybe we can add to some hedges for a cute countertrend trade. So far, hedges have hurt, until they won’t.

There is still is a lot of individual stock action as “add on” type trades continue to work as some stocks pause a few days and then go again. Those are the set-ups that I’m looking for to create cash flow. Some stocks continue to have clean breakouts into 2013 highs that also are working for some.

Banks gave us those type of opportunities earlier this week, and some went to 2013 highs, like BlackRock (NYSE:BLK), Citigroup (NYSE:C), Bank of America (NYSE:BAC), and Wells Fargo (NYSE:WFC). JPMorgan (NYSE:JPM) and Goldman Sachs (NYSE:GS) also started looking better.

Tech continues to have opportunities

Google (NASDAQ:GOOG) extended again, coming a long way since T3Live’s “Off the Charts” listed it after earnings around $803.50, as it cleared its descending channel.

Apple (NASDAQ:AAPL) went ex-dividend so today could be a bit choppy. Overall, it’s acting better since earnings. The longer it stays above $454-$456, the better. This upper level flag can look to give us another nice set-up long through $465ish.

Netflix (NASDAQ:NFLX) continues to consolidate since earnings. One day something will give to have it resolve. The micro buy price is $210ish, then $219. If it gets hit and goes below $204ish, then some will look to short.

Amazon (NASDAQ:AMZN) has a small inside box above $260ish. Maybe we get another move to $263ish, but it seems weaker.

eBay (NASDAQ:EBAY) is trying to rebuild. It’s in a gap that gets filled up to $56.

Yahoo! (NASDAQ:YHOO) continues to be best in breed and looks good but I like to enter on the 21-day MA, not at highs.

Chinese stocks got a bit better

Sohu (NASDAQ:SOHU) had a stealth rally into 2013 highs.

Baidu (NASDAQ:BIDU) woke up a few days back and seems like it might want to see $95-$100.

SINA (NASDAQ:SINA) looks interesting. It consolidated its very large gap up and now seems like it can go again if it clears $58.35ish.

LinkedIn (NYSE:LNKD) still needs time to absorb its earnings miss. If it doesn’t hold $173ish, it could see $165ish.

Facebook (NASDAQ:FB) tried to reverse a bit yesterday. It doesn’t look great. I nibbled for the first time since earnings, but my hard stop is $26.65. I might add if it goes above $27.30.

Some material stocks got better recently, like Freeport-McMoRan (NYSE:FCX) and U.S. Steel (NYSE:X).

Cliffs Natural Resources (NYSE:CLF) also had a nice day yesterday. I think it can continue, if it breaks above yesterday’s high of $23.22.

Metals seem like they might want to push a bit higher. Gold (GLD) has an intermediate box channel. If it can get above $143, perhaps we get a cash flow long back to $147-$148.

Retail stocks look good as well, as some are trying to build upper levels.

Some heavily shorted stocks continue to move for traders, like Green Mountain Coffee (NASDAQ:GMCR), Tesla Motors (NASDAQ:TSLA), etc.

Disclosure: Scott J. Redler is Long: SINA, CLF, MGM, JPM, GE, FB, BAC. Short SPY.

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