The market didn’t wait for resolution from the two-day Fed meeting to blast off, as indices are making new highs Tuesday. The inverse head and shoulders pattern highlighted by Scott Redler last week in the T3Live.com Morning Call has now ignited through the neckline of 1340-1344 in the S&P, with the measured move potentially taking us to 1410-1440. Strength has been widespread as the advance-decline line is showing this rally is alive and well despite an onslaught of extremely bearish headlines over the last two months.
In big cap tech, it has been the forgotten Google, Inc. (GOOG) that has lead the charge, as perennial market leader Apple Inc. (AAPL) is still resting after its big earnings jump. The catalyst this morning for GOOG was the announcement this morning of their own Groupon-like local deals service, which has also sent other stocks with similar offerings spiraling downwards. Travelzoo, Inc. (TZOO) has been among the hardest of those hit, down 13%. GOOG is up more than 2% on the day, and remains weighed down by ongoing antitrust cases being pursued in Europe and the US.
The fertilizers are acting decent but may need more time. These are often frustrating to trade for active traders because they give head-fakes, but with a long-term bullish story these stock should make new highs at some point this year. CF Industries Holdings, Inc. (CF) remains by far the strongest, while PotashCorp./Saskatchewan (POT) and Agrium Inc. (AGU) still look good above their moving averages. Also in the agricultural group, Deere & Company (DE) is up 3% today after bouncing back into its moving averages the last three trading days. We expect it to also see new highs. If you are a more long-term focused investors and are willing to play a slow moving ETF, we continue to like the Market Vectors Agribusiness ETF (MOO).
The oil servicers are another sector we are bullish on that has not acted well technically over the last few weeks while the market has been bouncing back. Halliburton Company (HAL) has been by far the strongest, making new highs the last two days and looking like it should go higher. The Oil Service HOLDRs ETF (OIH) looks like a great catch-up candidate, currently basing above its moving averages. Schlumberger Limited (SLB), the OIH’s largest component, is trying to recover its moving averages, and will likely be key to the index making a move over the next couple of days.
Silver has remained weak after dropping hard pre-market. Record volume yesterday represented to Scott Redler a potential topping signal in the iShares Silver Trust ETF (SLV). Shorts may continue to pare previous losses into the Fed announcement tomorrow, which could represent a bullish catalyst for precious metals if the tone remains the same for Ben & Co.
*DISCLOSURE: Scott Redler is long POT, F, SPY, OIH, JPM, AAPL, CRM, REDF, GIGM, BAC, JDSU, CSCO, GLD, LVS, CIEN, MGM. Short SLV.
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