World markets are mixed this morning and
(INDEXSP:.INX) futures are down four to five handles as there
doesn't seem to be much interest in buying this dip yet.
Yesterday, our markets tried to muster a bounce but it was very
feeble and unimpressive. The question now is whether we can hold
Monday's low, or whether we could test deeper support levels. The
S&P 1645ish level is the spot to navigate if you are actively
approaching this area. A break and close below that level and the
next important one to watch would be 1633ish, which is where the
100-day currently stands. If that spot holds, perhaps some pressure
could come off the markets with a close above 1658ish. During
corrective phases I believe you should be more measured with your
risk and involvement.
Fed minutes come out this afternoon and continue to be an obsession
of the market. What's good about all the "taper talk" is that it
has raised rates without the Fed having to do anything. Rates have
gone up and the market, which was up a scintillating 20% for the
year, has cooled off a bit. I think that is healthy. The question
now is, has the taper been completely priced in?
I do think at the last Fed meeting, the markets were a bit stronger
here and around the world, so the minutes could be leaning toward a
September taper. If it were a "new meeting" today, perhaps the tone
would be a little different. Either way, it should be interesting.
Use the pivot we discussed for adjustments regardless, which for
(NYSEARCA:SPY) is $164.76-$164.87.
In our Morning Call we will re-visit the banks, many of which had
nice, tradable "Red Dog Reversals" yesterday. If we were to hold in
today, these should stay above yesterday's lows, so there could be
an opportunity in this group during this soft open.
(NYSEARCA:XLF) has been stuck in a down trend since August 5 and
broke below its 50-day last week. Yesterday it had a Red Dog
Reversal at $19.75 that gave us a nice calculated setup for cash
flow, with a stop at the low of the day of $19.72. The ETF had
decent gains of 0.96%. The next obstacle is the 50-day, which
stands at $20.08. A break and close above this could help the ETF
to regain some power. See if this can create a "higher low" today
or if yesterday was just a one-day trade.
) saw a nice snap back yesterday after four days down and also gave
us a calculated Red Dog Reversal signal at Monday's low of $158.53.
It has some resistance from the 50-day at $160.42 after breaking
below it Monday. Reclaiming this key moving average could help the
stock to regain some upside momentum. See if it holds above
Bank of America
) held its prior pivot high of $13.99 and had a nice bounce back to
register 1% of gains yesterday. It's constructive to see this bank
holding the prior pivot high. A break and close above the 8- and
21-day moving averages at $14.40 could bring in some buyers. See if
it shows any relative strength today.
) broke below its 100-day at $49.18 and snapped back above it
yesterday. The stock saw an outside day at the 50-day, which is a
positive sign. Next obstacle is the 50-day at $50.40. A break and
close below this could lead to higher prices in the coming session.
) broke below its 100-day on Monday, then put in a big bottoming
tail yesterday as it tried to reclaim this key moving average,
which is currently standing at $52.30. A close above this could
confirm the validity of this bounce-type rally. This stock is where
the headline risk has been, so it's been a bit weaker than the
We will also go over stocks that continue to show relative
) had a nice gap and go yesterday. The stock was moving up slowly
but managed to clear all resistance levels to put in a new high at
$273.54. It closed on highs and well above the prior pivot high of
$270.31. It would be nice to see it hold above $263.79, which would
be healthy for higher prices moving forward. Use yesterday's new
high of $273.54 as the new point of reference to trade against.
(TSLA) continued to act well after breaking above the short-term
downtrend resistance last week. After four up days, it'll be hard
to initiate a new long up here, but holding above the 8-day at
$144.34 could lead to some potential continuation above $149.78
(FB) had a nice three-day move after finding some footing at the
$36 level. It was prudent to book some profits, but the stock has
room for a move back to 2013 high of $39.32 as long as the market
doesn't add too much pressure.
Green Mountain Coffee Roasters
(GMCR) had a nice three-day up move to push into the key resistance
of $82.95 before breaking out to a new high at $83.77. The stock
closed well off of lows signaling potential upside follow-through
Some other notables from yesterday:
(BBY) had a big gap and go yesterday after the company beat its
earnings estimate. BBY has basically returned from the dead this
year and now has a strong-looking chart as the stock has been
grinding higher above its 21-day moving average since June. It
could see some continuation above yesterday's high of $34.82. Gap
support stands at $33.
The TJX Companies
(TJX) also had an impressive gap and go move yesterday, as it broke
above all key moving averages and is already back at 2013 highs.
With the speed and power of yesterday's move, it could see some
upside follow-through above $54.41 if the market continues to hold.
(FDX) has been inching higher and looks like it could break out of
the bull flag consolidation pattern that was built in the past two
weeks. The stock has been holding above its 8- and 21-day moving
averages. A move through $110.33 could set it back in motion for
(AAPL) took a break yesterday after an impressive move since the
Icahn news. Use yesterday's low as the new point of reference. Next
micro support stands at $498ish then there is a bigger area around
Las Vegas Sands
(LVS) seems like it wants to hold in. It needs to hold $55.72 to
stay interesting, and then if it gets above $57.50 we could see it
gain some momentum.
(NYSEARCA:GLD) had a really nice move for tactical traders since
the "blood on the Street lows" on June 28. It's a bit weaker this
morning, creating another flag. See if $131.30 holds, or if it
tests the $130ish important spot for active momentum. Above $133.27
it could go again.
20-Year Treasury ETF
(NYSEARCA:TBT) had a small pullback yesterday as it was overbought.
Yesterday's low was $80.85 and bigger support stands around $79.67,
which could be a spot to "buy that dip." The 21-day is $77.63,
which is the moving average that it's been holding since May.