By: Scott Redler

When the S&P 500 was trading at around 1,050ish, we were looking for 1,085-1,095 as a target and now we’re at 1,110. It’s amazing how this market is like an elevator. We are 70 handles off the lows and everyone says there is no action. With that said, 1,112 is a resistance area, then 1,120-1,125 is huge. I WILL NOT BE BUYING THIS ZONE; as my first strategy, I will look for a short setup as it enters this area.


The market proved that dip buyers will be rewarded–like last year–and stock selection with the right price pattern will generate cash-flow.

Tech:

  • Apple (AAPL) is now in a new 4-day range with the support side checking in at $200,82 and resistance at $203ish. See how it handles each area.
  • Google (GOOG) is opening above its pivot. As long as it holds $543-544 we can see $550-560 very easily.
  • Baidu (BIDU) is a monster. I would avoid it for now, as it’s extended. I’d take profits on the longs, and if you’re quick, look for a short setup.
  • SanDisk (SNDK) is back in the game. It needs time to setup, but keep it on the radar.
  • Amazon (AMZN) gave us some micro shorts last week, but did not fall apart. It’s stuck in a lower range. Look for resolution at some point if volume comes in.
  • First Solar (FSLR) seems like within a few weeks it will be trading below $100. It has to get a daily close below $110 first.

My Three Amigos:

  • I isolated Cree (CREE), VMWare (VMW) and Intuitive Surgical (ISRG) many times lately–especially when they wedged going into February 11th. These stocks exploded!
  • Cree (CREE) is at new highs and I would sell if you went long at around $58 (it’s opening at $67 today). I will look to tier in short here for a CASH FLOW TRADE.
  • VMWare (VMW) is right at new highs. If you’re not long, you missed the meat of the move, BUT it’s not a juicy short yet.
  • Intuitive Surgical (ISRG) through new move highs. If you’re long, sell some here.
  • These stocks are all PRIME examples that you MUST TIME THE MARKET. Price patterns work for leverage.

The Commodities:

  • Freeport McMoran (FCX) and U.S. Steel (X) both exceeded my targets for a bounce. These are great vehicles to trade in this market. As of now, neither is compelling, as they could use a resut, BUT you don’t need intraday tactics to trade these here.
  • Oil-reached our bounce targets. I am flat now, but will not short.
  • Gold-as long as it holds $1,100, the technicals are starting to get stronger for more attention besides just intraday trades.

The Banks:

  • Goldman Sachs (GS) is kind of interesting. It held $154-155 on the Fed move. A close above $157 can take this back to $160-162.
  • Bank of America (BAC) had a big move for itself and could use a rest.
  • JP Morgan (JPM) is not compelling, but if GS gets to $160-162 then this could see $41-42.

THIS IS A TOUGH SPOT IN THE MARKET. IT’S HARD TO SINK YOUR TEETH IN LONG AFTER SUCH A BIG AND FAST BOUNCE–BUT YOU CAN’T FIGHT THE TAPE EITHER. So, you must be very VERY selective and know your time-frame.

Overall, this type of bounce must make you market neutral and neither bullish nor bearish. Take advantage of setups and market ranges at this point.

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