The markets are pulling in slightly Tuesday morning after the S&P and Nasdaq eked out gains in yesterday’s session. You can’t fault stock for wanting to rest after the recent acceleration of the uptrend. Data this morning showed inflation is heating up around the globe, and investors may be cautious about what the Fed may have to do with interest rates if inflation becomes a significant worry. United States Steel Corporation (X) is among the strongest stocks in the market today after Goldman Sachs came out with very positive comments and a $75 price target.
Tech Digesting Hearty Gains
High beta tech leaders, especially, are absorbing recent gains. Netflix, Inc. (NFLX) is holding lower after yesterday’s stunning short squeeze, down more than 3%.
With the stock satisfying most price targets, there may be few investors still looking to buy this stock at current levels. Apple Inc. (AAPL), Google, Inc. (GOOG), Amazon.com, Inc. (AMZN) and Baidu.com, Inc. (BIDU) are also pulling in to varying degrees.
Ags Weak
The weakness has been significantly more pronounced in the agricultural group, where our favorites PotashCorp./Saskatchewan (POT) and The Mosaic Company (MOS) are pulling off hard into the area where they broke out from on Friday. For an active trader this was certainly a day to take some profits after early selling pressure, but long term we feel the fertilizers will be juuuuust fine. I am as big a long term agricultural bull as you’ll, but certainly never like to see days like this. The selling feels a little bit overdone.
Downside Follow-Through After Reversal
While we have not had much short on our mind, JDS Uniphase Corporation (JDSU) and Finisar Corporation (FNSR) came on our radar as shorts yesterday after potent reversals. Scott Redler sent a note out to Minyanville’s Buzz and Banter and to his community on T3Live.com’s Virtual Trading Floor yesterday afternoon highlighting his short position in JDSU, and the stock has seen downside follow-through today.
Gold and Silver
Gold and silver gapped up this morning seemingly on inflation news. During the session, silver has bounced around in a tight range and is now back to near flat. SLV still feels like it will make new highs in the coming days. Gold has been stronger intraday, holding its gap up but stalling in front of its 50-day moving average. The SPDR Gold Trust ETF (GLD) has more room to highs, but we believe it can get there in the coming weeks as inflation pressures heat up.
*DISCLOSURE: Scott is long GLD; Short SPY.
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