By: Scott Redler
…Get em a body bag yaaaaaaaaaaaah!
That’s probably how you feel this morning if you took home some of the strong tech and commodity names from yesterday’s move. The question is, can the market rise up with the Crane Technique and finish this oversold upmove into the weekend (as Mr. Miyagi said: “if done right no can defend!”).
Anyway, tech was strong yesterday, with lots of nice pivot buys and great patterns:
- Apple (AAPL) broke above $196-197 and is now opening down $1.50. I will look to see if I can buy it for a gap fill and quite possibly (although somewhat unlikely) a trade through yesterday’s high and into 200+ land.
- Amazon (AMZN) and AAPL are very similar. It was up early and blasted off. Watch to see if $118.50 holds. If so, we can buy this down open and if the market stabilizes, we can then get a trade through yesterday’s highs.
- Research in Motion (RIMM) also was strong and is actually UP premarket! I will pare down my longs just to be safe, but this has room to $71ish now.
- Cree (CREE) broke out nicely. Check out how it acts around $59ish.
- Google (GOOG) still frustrates me. It has not acted right AT ALL. I will see if it can go positive and bring about a complexion change-trade that can really turn on if the stock breaks $540-542 on HEAVY volume.
The problem with the above strategies is that if there is no bounce, trying to trade out of overnight longs can be PAINFUL, and the leg sweep turns into a knock out!!!
- Commodities were very strong all day yesterday, even as the Euro traded down towards Friday’s low.
- Gold had a great move, but is coming under pressure today. It might be tough to recoup these losses due to the news out of China that their reserve requirement will rise for the second time this year.
- Across the board, commodities can see a lot of pressure as a result of this news. That includes Freeport McMoran (FCX), U.S. Steel (X), etc. (both closed on their highs yesterday), so if you took them home long as a momentum trade, you feel very blind-sided this morning.
- If you are long from overnight, watch price action closely and just cut losses if there is no bounce.
- The casinos woke up yesterday! Las Vegas Sands (LVS), MGM (MGM) and Wynn Resorts (WYNN) all had nice moves. They might be able to hold up, so watch price action closely here as well.
- For the first time this year, the homebuilders made me some money. There usually is only one trade per year here, so don’t go back to the well unless necessary.
- The financials are the wild card. Goldman Sachs (GS) is still trapped in its lower range. Watch GS closely today. $150-151 is VERY important support. If that breaks, this rally will be toast. If GS can trade up through $154-155, the banks might get a lift and help the market overcome weakness in commodities.
BTW, I love the tough love approach on GREECE. Let them solve their own problems. Europeans don’t want to open up that pickle jar the way the U.S. did in starting “bailout nation.” It might take Greece longer to recover, but at least this promotes long-term stability and Greece will have to be more prudent. I hope that the U.S. follows their lead when it’s time for us to deal with California and the pending state short-falls. It’s simple common sense–only spend what you make, and save money for a rainy day. Isn’t that what our parents taught us?
