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All major US indices tacked on more than 1% of gains to build on yesterday's bullish reversal, but the action continues to confound suddenly skittish traders. After a sizable gap up in the morning, the indices quickly filled most of the gap to leave dip-buyers with little conviction about holding long positions. However, stocks steadied themselves after 11 AM ET and rallied for most of the day, again showing the most consistent strength in the final hours of the session.
Strong earnings from Yahoo! (YHOO) and Intel (INTC) last night helped spark this morning's gap up, and if earnings again drive the pre-market tape we could be headed for a gap down tomorrow after Google's (GOOGL) numbers fell short of Wall St expectations after the close. Both GOOG and GOOGL are down more than 4% after the close, but off of their lows of the evening after the company missed both on the top and bottom lines.
*DISCLOSURES: Scott Redler is long SCTY, FB, TSLA, LNKD, PRAN calls (from weeks ago that are likely to expire worthless). Short SPY.
There are mostly green arrows around the world this morning after the U.S markets staged an impressive upside reversal yesterday. Europe is led higher by the DAX up 0.84%. Asia is green with a potent move from the Nikkei up 3%.
S&P futures are up 7-9 handles as our markets staged a very impressive reversal yesterday, especially in tech. The “good book" says on a day like yesterday you try to cover some shorts, test some longs and then measure the commitment to see if the composure changes. The S&P held 1815 for the third session and closed near highs. Today we need to see how much of the morning gap holds to measure the appetite with resistance at 1853ish then 1864.
Technology stole the show yesterday as the QQQ’s traded below the $83.91 pivot as most thought it would see the 200-day, but then put in its low at $83.28 about $0.50 above. Then it roared back above $83.91 giving you your Red Dog Reversal pivot for adjustments. I’m sure some shorts who wanted to wait to cover, or longs who wanted to see the 200-day, had to think fast as we rallied quickly with many igniting five-minute bars. Tech did close on its highs and this morning we are gapping up. We need to see how much of this gap holds. There is resistance at $85.73 then $87ish.
Intel (INTC) topped its earnings estimates and traded 3.4% higher after hours. Watch its opening gap as holding above this gap in the first 15-30 minutes could give us an entry for a potential gap and go trade.
Yahoo! (YHOO) is up more than 7% overnight after strong earnings, boosted by continued robust growth in Chinese e-commerce giant Alibaba, in which it owns a stake.
Head-fakes have been the name of the game in 2014, and today's bipolar action epitomized the manic environment traders are working to adjust to in recent months. After opening higher and showing some (very) brief early strength, the indices entered a steady decline that would last until 1 PM ET. However, the market found some serious footing after lunch, rallying all the way back into positive territory as many highly tech stocks enjoyed ferocious snap-backs. The S&P, Dow and Nasdaq finished up 0.5%, 0.6% and 0.2%, respectively, but the Nasdaq's relative under-performance doesn't tell the whole story given how weak tech stocks had been just a few hours before the close.
The most beaten down stocks and sectors enjoyed some of the strongest rallies. In social media, Twitter (TWTR) was the standout with an impressive 11.4% rally. Facebook (FB) was only just able to climb back into positive territory after heavy early losses, while LinkedIn (LNKD) finished with a 3.1% gain.
Data and security stocks have gotten absolutely crushed since the beginning of March, but we saw some strong bounces in that group, led by Workday (WDAY), which finished up 6.6%. Zillow (Z) was another tech standout as it rallied 4.1%.
Biotech (IBB) also staged a strong bounce off the lows to finish up 1.04%.
After the close, Yahoo! (YHOO) and Intel (INTC) were the most noteworthy names to report earnings after the close, and their strong numbers are helping the Nasdaq (QQQ) get some upside follow-through already. INTC is up about 0.5% right now, but YHOO stole its thunder with a strong report that has the stock up 8.5% after-hours. Very strong revenue growth from Alibaba, the Chinese e-commerce giant in which Yahoo! owns a stake, continues to the biggest driving force in YHOO stock's renaissance.
*DISCLOSURES: Scott Redler is long FB, LNKD, TWTR, YELP, KORS, BAC calls, PRAN calls
World markets are mixed this morning as Europe is down small with the Ukraine once again a rising concern as the conflict escalates in the East. Asia is mixed with the Nikkei having a feeble bounce back up 0.62%. The Shanghai Composite is down 1.4% after its outside day on 4/10.
S&P futures are flattish after a roller-coaster ride yesterday as many sectors and groups did round-trips, but ultimately ended on the plus side. When you have a holiday-shortened week with low volume, markets can push the envelope both ways. The oscillator that hit -65 did turn up, and sometimes works its way to neutral during slow weeks. If the markets want to try and rally for a few more sessions to retest some broken support and trend lines it could (but doesn’t have to), so be flexible and take trades.
If the S&P wants to get in motion it will need to clear the 1835 pivot and that could open the door to re-test 1840-1844 area. If the Bears want to remain in control they shouldn’t let the markets close back above 1850ish for more than a session.
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The market opened higher this morning and held higher until noon, but then for the next three hours the S&P faded back to flat. Just as the market accelerated to the downside and looked potentially set to go negative, it turned on a dime and staged a furious rally in last 45 minutes of the session to finish with healthy gains. The S&P, Dow and Nasdaq closed up 0.8%, 0.9% and 0.6%, respectively.
Although the market was able to finish the day in positive territory, holding long positions during the intraday roller coaster was no easy task to say the least. Biotech (IBB) once again showed relative weakness and went negative first, foreshadowing weakness in other sectors like it has on several occasions occasions.
Once again there were divergences even within sectors. Tesla (TSLA) showed weakness among tech and put in a bearish engulfing bar. I caught an afternoon short after seeing it act heavy early. Google (GOOGL) was one of the stronger high beta names as it tries to get back on track.
Citigroup (C) was able to bounce 4.4% after a better-than-expected earnings report, but it didn't do much to help the now-beleaguered JP Morgan (JPM), which put in a very bearish candlestick (0.6% loss after opening higher) and continues to feel heavy following Friday's disappointing earnings.
Right now traders remain in cautious mode, and I think the best approach is to take quicker trades until we get more calculated opportunities.
*DISCLOSURES: Scott Redler is long PRAN calls - this position is from weeks ago prior to the large gap down and I expect the calls to expire worthless
World markets are mixed but mostly red this morning as there is lots of continuation selling from the weakness that started a few weeks back. Europe is down about a half a percent across the board as EU foreign ministers are holding an emergency meeting this morning amid escalation in Eastern Ukraine. Asia is holding up a bit better and commodities continue to have some strength.
S&P futures are now up 4-6 handles as traders try to figure out what to do. On April 4th we had a nasty outside day as we traded above 1885ish and came back below it with force, engulfing the top third of the channel that we were navigating. This day confirmed the weakness that was foreshadowed by the dislocations we’ve been seeing in sectors like biotech, small-cap high growth names, and tech.
On 4/10 markets staged another engulfing day, giving clues that the 1840 support would potentially not hold and we could see lower prices. There have been lots of spots for adjustments.
We are below the 100-day and above the 200-day as we enter a holiday shortened week with more earnings reports starting to roll in. The oscillator is -65ish, making it hard to short, but we are in no-man’s land so I’m not sure this will be the spot to put on risk for more than a trade. I’d say stay patient and continue to use the RDR tactic and the “h” pattern sell set-up, or just do a lot less until we get more clarity.
The S&P 200-day is 1761. You would think we could test that zone at some point. Friday’s pivot low is 1814. If we bounce a bit this week there is some resistance at 1828-1832 then 1840-1843. A sharp move lower early this week into some type of bounce would be the best set up, but I’m not sure that develops.
The market bounced impressively to get back into green territory after this morning's gap down, but the rally fizzled in a big way in the afternoon as the major US indices closed on their lows. The Nasdaq was the weakest with a 1.3% loss, while the S&P and Dow both fell 0.9%. Traders who bought the down open seemed to be only renting those positions with no intention of holding longs into the weekend after some of the recent potent selling we have seen.
The banks were in focus today as JP Morgan (JPM) and Wells Fargo (WFC) kicked off earnings season for the sector - and the stocks suffered two very different fates. JPM missed estimates and gapped down sharply, finishing with a 3.66% loss. It, like many stocks today, tried to bounce in the morning but the bounce petered out as the day wore on. WFC, on the other hand, gapped down slightly despite a decent report, but after a quick 5-minute bar to the downside reversed hard to the upside and continued the rest of the day on its way to a 0.78% gain.
Get ready for next week's action with Marc Sperling's Trade Idea of the Week, which is a free weekly T3 Live newsletter delivered every Monday before the market opens.
*DISCLOSURES: No relevant positions
There are mostly red arrows this morning as world markets follow the downside action in the US markets from yesterday. Europe is down over 1% across the board and Asia is broadly lowe, led down by the Nikkei.
Yesterday our markets got hit hard starting with the Biotech (IBB), Russell 2000 (IWM) and Tech (QQQ) with high beta names engulfing Wednesday’s bounce in the first 30-45 minutes, giving some clues that the two-day bounce would be short lived. After that the SPX followed through lower breaking 1852 giving some clues to reduce some risk again if you were trying for some type of bounce… It also could have been a spot to put some shorts back on.
Later in the afternoon we broke below 1840ish putting in a new pivot low at 1830ish, which is now your pivot for action. The question for traders today is: do we get a “swoosh” type trade or do we retrace some and then see more downside at some point next week. Either way the market has been giving signals for the past month and feels very broken. Traders using the tactical RDR or the “h pattern" sell set-up are having success if they are quick. The 150-day that we held in the January correction for the SPX is down at 1792ish.
Wells Fargo (WFC) and JP Morgan (JPM) - the two strongest bank stocks of late - earnings came out. JPM missed and is down 3.86% while WFC beat and is flattish. See how they act today for some clues.
For today’s trade I would just write down the recent weekly low or daily low on the stock or group you are watching and see if it stays below or reclaims it for short term action.
After a two-day market bounce from oversold levels, we emphasized that traders remained in a cautious, wait-and-see type mode (...Jury's Still Out and Trader's Adopt Cautious Approach)- but I think you would be hard pressed to find many traders that expected the magnitude of the selling that went on today. All major US indices engulfed those two days of gains and finished sharply negative near lows of the day. The Nasdaq was the biggest loser, finishing down 3.10%, while the S&P dropped 2.09%.
The Biotech ETF (IBB) flashed the first major warning sign today as it engulfed yesterday's large gain within the first hour after the open. The selling continued all day and when it was all said and done, IBB closed down 5.61%. Gilead (GILD) was a major drag with its 7.32% loss following concerns from Congress about the exorbitant cost of the company's new hepatitis C drug treatment.
Tech also got slammed as well: Google (GOOG) -3.59%, Amazon (AMZN) -5.18%, Tesla (TSLA) -5.87% were some notable losers, among many others. Social media stocks were among the hardest hit. Facebook (FB) showed tremendous relative strength yesterday, but gave it all back today with a bearish engulfing bar and 5.21% loss. Yelp! (YELP) was even weaker, recording a shocking 10.92% loss.
Given the recent action, it certainly feels like stocks want to continue lower, but be wary of chasing moves in either direction. The market over the past several weeks has been a series of head-fakes, and to succeed you've had to be willing to short strength and buy weakness at various times. If the volatility is too much for you, always remember that cash is often a great position.
*DISCLOSURES: Scott Redler is long PRAN calls, Short SPY, TSLA, FXI.
There are mixed markets around the world as we try to figure out what this two-day snap-back “means” moving forward. Europe is down small, but look at the channel in the EWG as it’s a been a good indication that we could see higher prices. Asia has some green arrows despite the poor trade data out of that region. The Nikkei is still struggling, but the Shanghai Composite has been acting better with the FXI doing very well since we showed that pro gap on 3/21 that helped ignite a move in that region. It’s been above the 8- and 21-day ever since that gap up.
S&P futures are down 3-5 handles this morning after a spirited two day move from the Red Dog Reversal that transpired in the 1840 zone. Tuesday it broke 1841 and then closed at 1851 and then had nice upside follow-through yesterday, hitting as high as 1872ish, penetrating a bit higher than some people might have thought. That’s what the market does - it pushes the envelope.
The S&P is back above the 8- and 21-day EMA and we need to see if it holds above. If market digests above 1860ish for a session or so, perhaps we could head back to the upper end of this channel that we’ve been navigating for almost three months. A close below 1860ish could help the sellers re-think they can regain some control.
On Tuesday the names that have been weaker for the previous month or so diverged and showed nice relative strength. Biotechs, High-Beta Tech and some Chinese Internet names. It wouldn’t go lower on Tuesday as the S&P tried, and these names bounced well from that zone.
Kimberly Clark (KMB) is a trade idea that has been sitting patiently on our Off the Charts watch-list and then broke above multi-month resistance yesterday to put in a new high at $111.93. The stock has been building its upper-level base and found support at the 21-day EMA, showing relative strength in the recent pull back. Look for upside follow-through above yesterday's high of $111.93 in the coming sessions.
If you don’t have Off the Charts, the nightly newsletter is filled with great calculated trade ideas like KMB. Give it a try by signing up at T3Live.com today!
The market bounced for the second straight day led by the beaten-down high beta tech sector. The Nasdaq led the charge with a 1.72% gain, while the Dow and S&P rallied 1.11% and 1.09%, respectively.
Facebook (FB) was the big standout in tech as news sparked a gap up this morning, and then the chase was on during the session. When the dust settled FB finished the day up 7.25%. In today's Morning Call John Darsie talked about how T3 Live contributors were targeting FB as the best tech dip buy candidate based on its macro relative strength (still well above its 200-day).
My Trade Idea of the Week First Solar (FSLR) also digested well following yesterday's igniting move, posting a 0.78% gain and looking poised to break out of its bull flag pattern.
Despite the solid two-day bounce, some could look to short a bounce in relatively weak stocks. Tech stocks in particular still have a lot left to prove.
*DISCLOSURES: Marc Sperling is long V, WDAY, HPQ, YELP, PCYC, TWTR, SCTY, and long calls in the following stocks: SCTY, TWTR, RENN, MCP, DRYS, ZNGA, EBAY, VXX, INTC, FEYE, TWTR, FB, LNKD.
World markets are mixed overnight as Europe is up small and there are again divergences in Asia. The Shanghai Composite finished up 0.33% and the Hang Send surged 1.09%, but the Nikkei is becoming an increasing concern as accelerated to the downside with a 2.10% loss. Japan had one of the hottest stock markets in 2013, and the slow start to 2014 had so far been chalked up to healthhy digestion following a big run, but if this keeps up it could become a more significant.
US markets were able to bounce yesterday after two days of heavy selling, and even more encouraging for traders was the fact that tech stocks joined the rally as the Nasdaq posted 0.81% gain. Despite some healthy bounces in big-name high beta tech stocks, a lot of questions remain about whether this could just be the eye of the storm. The S&P also staged a Red Dog Reversal and finished up 0.38% to halt the recent slide, although the index has held up much better overall than its tech-heavy counterpart. Bonds and value sectors remained strong as investors look to diversify out of riskier equity assets.
The S&P the key support level of 1840ish with the RDR and has room for a bounce back to the 21-day EMA at 1862, which would be the first resistance level if it can see some upside follow-through.
From Off the Charts there are two energy names worth keeping an eye on after re-tests of prior breakout levels.
Diamondback Energy (FANG) has a healthy uptrend that has been intact since mid-January. The stock triggered our entry of $66 on a potent breakout on 3/27 and then found some support at the 21-day EMA on the recent pull back, showing relative strength during a period of market turmoul. While it’s been making higher lows, holding above $64 would keep its momentum intact for higher prices moving forward
Baker Hughes (BHI) is another strong energy stock that held above the 21-day EMA, showing relative strength while the market has been put under some pressure recently. It also held above the breakout level of $63 that was listed as our entry price, showing commitment. Look for potential upside follow-though as it closed on highs yesterday.
Tech stocks were finally able to bounce Tuesday as the Nasdaq posted 0.81% gain, but questions remain about whether this could just be the eye of the storm. The S&P also staged a Red Dog Reversal and finished up 0.38% to halt the recent slide, although the index has held up much better overall than its tech-heavy counterpart. Bonds and value sectors remained strong as investors look to diversify out of riskier equity assets.
World markets are mixed this morning with most taking the cue from yesterday's downside follow-through in US markets. Europe is down around 1% across the board while the Nikkei continued its recent slide with a 1.36% loss. The Shanghai Composite, on the other hand, continued its recent resurgence thank to a big rally in Chinese banks as the index finished up 1.92% in the overnight session.
US futures are straddling the flat line and basically up or down marginally as the indices look to stem the tide of recent selling. The market picked up yesteraday where it left off Friday as all major US indices finished the day down more than 1%. The flight to safety continued as bonds surged again and Consumer Staples (XLP) and Utilities (XLU) held up best among equity sectors. While the Nasdaq did again post a greater percentage loss (barely) than the S&P, tech stocks showed some of the more noticeable signs of life during yesterday's session.
Technically speaking, the S&P broke below prior breakout level of 1850 to retest March's key support level of 1840. Use yesterday's low of 1841.50 as new pivot level to trade around for perhaps a quick oversold bounce.
The market picked up where it left off Friday as all major US indices finished the day down more than 1%. The flight to safety continued as bonds surged again and Consumer Staples (XLP) and Utilities (XLU) held up best among equity sectors.
While the Nasdaq did again post a greater loss (barely) than the S&P, tech stocks showed some of the more noticeable signs of life during today's session. Apple's (AAPL) 1.57% drop helped weigh on the Nasdaq. A few stocks like Netflix (NFLX) and Yelp! (YELP) found support at their 200-day EMAs while Google (GOOG) and Priceline (PCLN) closed off their lows. Facebook (FB) put in a Red Dog Reversal and is definitely on traders' radars for a bounce. Low-beta tech was strongest as IBM and Intel (INTC) rallied 1.43% and 1.24%, respectively.
Biotech also looks like it has found some footing after the IBB rallied 0.67% today. Biogen (BIIB) was one that put in a Red Dog Reversal to gain 2.05% while Gilead (GILD) is also holding up well after its bounce off the 200-day.
Banks were the standout to the downside today as the XLF fell 1.53%. Citigroup (C) broke down out of a lower-level bear flag pattern and Goldman Sachs (GS) showed extreme weakness with an ugly 2.87% drop. Wells Fargo (WFC) is holding up best, followed by JP Morgan (JPM).
So while the sell-off continued today, there were some small signs that we could be set for at least a short-term bounce. Most bounces weren't compelling enough to lead traders to jump in with both feet, but some started to dip their toes in select names.
*DISCLOSURES: No relevant positions
There are mostly red arrows around the world this morning as overseas markets respond to Friday's sharp sell-off in US indices. European indices are currently down anywhere from 0.5% to 1.2%, with the German DAX being the weakest spot. In Asia the Nikkei was the downside standout with a 1.7% loss, while the Shanghai composite was able to buck the trend and finished with a gain of 0.74%.
The market obviously finished last week on a very sour note as indices spent the entire session in a steady decline from their opening highs after the jobs report. The Nasdaq led the retreat, falling 2.6%, while the Dow Jones Industrial Average (-1.0%) and S&P 500 (-1.3%) registered smaller losses. The S&P actually finished higher for the week after steady gains the prior four days, but as we have discussed - sector rotation has helped the index hold higher while there has been significant weakness showing its face under the hood.
US futures are also weak again this morning with S&P futures down 6-8 handles while weakness in the Nasdaq futures is again more pronounced (down 25 handles currently, or 0.69%). The S&P broke below the recent breakout level of 1884 to put in a small breakout failure. The damage was contained at the 21-day EMA at 1865 on Friday. The next level of support is the prior breakout of 1850, see how it handles this key level.
Evan Lazarus, CEO of T3 Live, draws on his many years as a trader for a lesson in self awareness and assessment.
Taking an objective look at the successes and failures that are your trading results, is a first step in identifying what you are doing right and what aspects of your trading you can use some help with.
Evan looks at market themes on a broad scale and looks at charts of the following ticker symbols: SPY, PCLN, DDD, DD, and ALK.
*Disclaimer: Evan Lazarus has no relevant positions.
US stock futures were higher going into today's big non-farm payrolls report, and despite a lower-than-expected number futures are pushing higher so far. The US economy added 192,000 jobs in March, short of consensus expectations of 200,000, while the unemployment rate held steady at 6.7%. However, the prior two months' jobs numbers was revised higher by a combined 37,000, more than making up for the March shortfall.
The S&P is now set to open at another all-time high as futures are up 6-8 handles. Bonds are also strong this morning. The reason for the spike in futures after the number is unclear, but the fact that GLD surged with the futures tells you some may expect the Fed to rethink their tapering and, down the road, rate hike schedule based on the still-lethargic pace of the economic recovery. GLD is up almost 1% this morning.
World markets were mixed overnight with Europe up around 0.5% nearly across the board while Asia showed some divergences. The Nikkei took a rest and finished down marginally (less than 0.1%) while the Shanghai Composite reclaimed yesterday's losses with a 0.74% gain. European markets have held their gains after the US jobs report.
The erratic action continued in the market yesterday as the S&P made several different moves intraday that continued to frustrate traders craving some follow-through. Sector rotation continues to come out of tech, financials, small-caps and biotechs and into energy, utilities, conglomerates, basic materials, and retailers at times.
The erratic action continued in the stock market Thursday with major indices finishing the day with small losses. Stocks opened slightly higher and then remained strong after the opening bell, but quickly faded into the lunch hour. The market staged a bounce for an hour in the early afternoon before giving way to another sell-off through lows, then finally snapping back sharply to the upside in the final 90 minutes of the session?
Lost? You're not alone. Today's manic price action was indicative of the environment that has frustrated traders for the past several weeks.
In the grand scheme of things, you may look at the indices and say the technical composure is extremely healthy, but if you take a look under the hood there is a lot more damage than initially meets the eye. Sector rotation continues to key the S&P's resilience, and to make money trading right now you need to have the flexibility to trade stocks that might not have been at the top of your watch-list a few weeks ago.
Energy stocks once again led the charge as XLE made a new high. Independent oil and gas names like DVN, EOG, RRC and CHK were among the strongest, but the big winner on the day was Anadarko Petroleum (APC), which settled a long-running legal dispute and, as a result, rallied more than 15%.
The rally in basic materials stocks extended to some laggard groups like steel and coal plays. US Steel (X) and AK Steel (AKS) are looking better, while beaten-down Walter Energy (WLT) looks like it could squeeze a bit.
Tech (QQQ -0.79%) and small-cap stocks (IWM -1.01%) that traders like to see lead showed relative weakness once again. Biotechs also got hit hard as the IBB fell 2.85%.
*DISCLOSURES: No relevant positions
There are mixed markets around the world this morning as Europe hovers near the flat-line and Asia shows some divergences. The Nikkei continues to the be the recent standout to the upside and finished up 0.84% overnight, while the Shanghai Composite fell 0.74%. US stock futures are near the flat line after indicating slightly higher earlier this morning.
Right now there just don't seem to be a whole lot of catalysts for US indices and the tape remains very stock specific with some sector rotation that is frustrating many traders. We like to see sectors like tech, small-cap Russell stocks and at times the financials lead, but it is loswer-momemntum sectors like energy, transports, and utilities, for example, holding the indices higher while damage builds in certain areas under the surface.
The S&P managed to make another record closing high Wednesday, but it was once again a choppy and unconvincing session. Stocks opened higher and were strong in the morning, but faded around before once again surging into the close. New buyers don't seem eager to pile in at highs, but so far any significant selling has been contained thanks to impressive sector rotation. For support, the S&P has 1884 and 1875.
First we'll start with a couple of highlights from our Off the Charts newsletter, which has done a great job following the sector rotation and sharing the best chart set-ups.
Pitney-Bowes (PBI) staged an impressive breakout move yesterday after holding in two-month long base frollowing an igniting bar in late January. The stock put in a new high at $26.86 and closed above prior pivot high of $26.63 showing commitment. We put this trade idea on 3/3 with an entry at $25.75. Some consolidation above $26 after a move to new highs would be constructive for higher prices moving forward. It has earnings on 4/28.
Macy's (M) is another trade idea from our Off The Charts that has been acting well, as the retail group caught a bid yesterday and has been showing some relative strength. The stock made a new high at $60.88 near our target of $61.50. Holding above the 8-day EMA could keep its momentum intact moving forward.