By: Scott Redler
The market is about 6% off the highs and everyone is scratching their heads. I’m not sure why, considering that we had a 60+% move off of the lows last year. THIS IS HEALTHY!
As we move lower, traders are looking for areas to be both long and short. All in all, the action is very stock and sector specific. 1,072 is the micro level I’m watching in the S&P. We are opening up a bit this morning. See if 1,083-1,085 serves as some upside resistance. Ultimately it feels like we will AT LEAST see 1,030-1,040 before I would tell a friend to put some money into the market and feel safe about it.
If you’re a trader, here’s your rundown:
- Apple (AAPL) was a great short on Friday after the erratic trade during the news-flow of last week. The next area to try for a long setup would be $184-186.
- Amazon (AMZN)–reported great earnings and it was sold. It was a nice short in my $130-131 zone, now it looks like lower prices should be coming.
- Microsoft (MSFT) we took long into earnings. If you blinked, you missed your sale in the $30 area. WOW you need to be quick right now.
- Google (GOOG) is still working lower, with some small trades in the middle.
- SanDisk (SNDK) was punished on Friday. It feels like yesterday I was shorting the $30-31 level and getting frustrated. That was over Christmas. THIS IS WHY TIMING IS KEY!!!
- Cree (CREE) and VMWare (VMW) are still working off their earnings gap-ups after awesome reports.
- The banks had a day and a half long in them that amounted to NOTHING. They should be choppy in the near-term. Goldman Sachs (GS) still looking like $135 will be in its future.
- Freeport McMoran (FCX). U.S. Steel (X) and the commodities have been punished. I will look for some type of 80-20 bounce type trade here.
- Gold–the pattern is getting a bit bearish here. After selling gold on December 2nd and playing the flash bounce, now the new macro pattern suggests a short might be in the cards. I will show this setup later.
There is a ton of news coming AGAIN this week. Tomorrow, Volcker will be going over the new bank plan. That should be fun! Then Friday we have the big jobs number. Take trades and test levels. We just had the easy short after the break of the uptrend at 1,130 (remember, we said a 30 minute close below that line would be trouble–well, we are now about 60 handles lower!).
