By: Scott Redler
…Let’s See What the Market Says
It’s one thing to have a plan, but with any plan, we need confirmation in order to enter a trade. Traders need to know a little about a lot, because those that thought they “knew everything” got crushed last year not listening to the market. It’s a New Year, a time when all predictions come rolling out. This is the first year I don’t have too many “compelling calls” like the 2008 crash, or the 2009 gold trade, or the major March low trade. This is the year of flexibility and rotation. A year in which everything won’t go up like last year. A year that should truly be a stock picker’s market.
With that said, we need to see where the money goes, watch for complexion changes, and have a plan ready for each stage in which the technical makeup of the market changes. For now, the S&P is opening right where the 3:30 pre-New Year’s Eve selloff kicked in (that was a very sneaky move!)–the pros triggered some stops and stole some stock to kick off the New Year.
If the S&P can hold the opening gap for the majority of the day–that 1,119-1,121 area–then it will negate Thursday’s semi-potent down-move. If that’s how this unfolds, then we are STATUS QUO once again and the market should pick up right where we left off earlier last week. In the alternative, if the market does not hold today’s gap up, then we could see some technical damage.
In Big Cap Tech–
- AAPL still looks great–holding above $210 will be key which will then trigger an add above $214 for an additional momentum move.
- AMZN has a small double top–semi bearish–but it’s worth a look long against the $133-135 area.
- GOOG looks good, but I would watch to see if $620 holds for an extension higher.
- RIMM looks good–it held its earnings gap and deserves an add to the longs if it can get and stay above $68.50.
- SNDK has been a monster–after some pain, we got our day and a half short–now it needs some time to digest the large move.
Sector Rundown:
- We are in Tier 2 long gold with an average cost of $107.50 on the GLDs–Gold is opening above its downtrend line today. If it can hold $108.50 we can see a move back to the $110.50-112 area rather quickly.
- Oil is opening above $80–if it holds, we should see a quick move up to the $84-85 area.
- Goldman Sachs (GS) triggered long last week at around $165.50–it’s now opening above $170. If it powers through the 50-day moving average, we should see $175-180. We need to see if some of the other banks can catch up–BAC is holding $15, but needs to move through $15.30-15.40 with volume to be more compelling. JPM needs to break and hold above $42. The banks lagged the last part of the upmove into the New Year–we need to see if the financials can regain some composure in this new year.
- The Casinos were upgraded this morning–they’ve been out of play for a while now, maybe this wakes them up. LVS needs to hold $16.50 and WYNN needs to hold $60 for a spark.
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The OIH looks decent here–but, there are three lower highs in place. It needs to hold above the 50-day moving average and then break through its latest lower high for some continued upside.
Today’s gap open is VERY IMPORTANT—It needs to hold for a major part of the day for this market to extend higher through the early part of January.
