World markets are swimming in red this morning after the Bank of
Japan decided against new policy measures to soothe volatile
(INDEXNIKKEI:NI225) dropped 1.45% in the overnight session, while
most European indices are down around 1.7%.
Yesterday, the Nikkei bounced back around 5% after a period of
extreme weakness. The index, which at one point was up 50%
year-to-date, corrected 20% off highs (which many consider bear
market territory) but rallied heading into the BoJ meeting, where
many expected new accommodative steps to be taken in light of
recent erratic action. Goldman Sachs even came out and said to buy
Nikkei futures into today's rate decision, which is just the latest
in a long line of... head-scratching calls.
(INDEXSP:.INX) futures are down 15 handles, unable to shrug off
weakness in foreign markets this time around. Yesterday we had an
inside day after an eventful week to kick off June, and many
expected volatility to cool down heading into the heart of summer.
However, in today's new normal of meddling central banks,
volatility could be here to stay.
Early last week, the market hit the lows of its biggest correction
of the year. Although the dip found support at the 50-day moving
average, the "good book" tells you not to chase longs after a 40+
handle move from Thursday's low. Friday's extension and yesterday's
open was more of a chance to take some profits and trail stops,
rather than a time to chase new longs. A lot of stocks have had
large travel ranges from Thursday's low to yesterday's open into
Today it will be interesting to see if we can come off the lows and
pare some of the early morning losses. We will be near gap support
from Friday's jobs report-inspired up open, which will give us a
level to trade against. We will use that level to give us clues
about "what this market is made of" in the short- to
S&P 500 ETF
(NYSEARCA:SPY) can hold above $163ish, it would show commitment to
the recent snap-back off the 50-day moving average. If we don't
hold that level, it could create a choppier environment and perhaps
a retest of that 50-day moving average.
In a sea of red, you always look to stocks that closed strong the
prior day to see if they can go green and help lead us off the
lows. Several notable tech leaders fit that description.
) had a really nice move right to our resistance target of $890ish.
If it can hold above $880ish, I would deem that constructive. If
you sold some into day three of the bounce yesterday, you could
look to buy a dip here.
) has seen a very nice move since last Thursday and through our
$272ish trigger buy area. If you sold some yesterday or want to
pick some up at lower prices, perhaps see if you can buy back
around the $275-278 area for a retest of the breakout. However, if
that area doesn't hold, AMZN will relinquish some of that bullish
) is getting very tight and looks ready for a move, in my opinion.
As long as it stays above $210ish, I believe at some point it could
break above $224-225. I have noticed that sometimes this stock
likes going up in a sea of red, so see if early morning volume
) sold off after its annual Worldwide Developers Conference
yesterday. There were some good upgrades introduced to several of
its software and hardware, and a streaming Internet radio service
introduced, but the market did not appear impressed as AAPL sold
off 2% from its highs of the day. If it doesn't bounce back quickly
today, it could fall off most traders' radars (if it didn't fall
off already). The $432ish level is pretty big support--if AAPL
closes below that level, take some care.
) had its first potent bounce back yesterday; perhaps watch to see
if it tries to go green today.
(YHOO) still acts well, and needs to hold above $26.45 to maintain
strong bullish composure. The company will host its annual
shareholder meeting today, and will likely see some smiling faces
after the stock's strong performance under new CEO Marissa Mayer.
(NASDAQLSNDK) looks very strong and almost near breakout highs. If
the market lets stocks break out, I think this could be near the
top of the list. The long action area stands around $60ish.
(FB) finally saw some strength yesterday and has its shareholders
meeting today. If it can hold yesterday's gap around $24ish,
perhaps it could act a little more constructive and see some higher
(TSLA) did a decent job absorbing the negative
article, opening lower and rallying back into positive territory.
For me to trade it again, TSLA will now needs some time to set-up
again. The $96ish area is some support, then there is more
significant support at the 21-day MA, which sits around $90.5. If
it can go green today, there is some resistance at $102.90.
The solar group group was very strong yesterday. We will see if the
groups gets any interest today in a down market.
(FSLR) was mentioned as a breakout candidate out of the upper wedge
pattern. The stock made that breakout move yesterday and triggered
my firm's listed buy price of $54.67, going as high as $56.70 and
finishing the day up 6.22%. The stock closed on highs, so look for
continuation as it has room to $59 before it runs into the next
(SPWR) also saw some relative strength yesterday and registered
impressive gains of 9.2%. The stock held its 21-day moving average
during the most recent pull-back, showing commitment to the upside.
It has cleared some resistance levels on its way up and looks
poised to see higher prices as long as it holds above $20.35-20.65.
(SCTY) has been on our radar for a potential bounce, but perhaps
due to anxiety over today's IPO lock-up expiration, the stock has
been a bit lethargic. However, SCTY has based at the short-term
support level of $35.50, so it hasn't completely broken down.
Generally speaking, IPO lock-up expirations may be deemed bullish
because a large number of new shares hit the float, but we have
seen some squeezes around lock-up expirations in the last few
years. Keep an eye on this name and obey technical rules. The
longer it holds the $35.50 support level, the higher probability we
could see a quick rally back to $45.15ish.
(LDK) saw an igniting move yesterday after several days of
consolidation above its 200-day moving average. LDK closed the day
up 14%. The company is reporting their earnings before the open
today, so keep this stock on your radar as there could be some
(JASO) saw a nice rally yesterday after holding its key support of
$6.70 for a few days. JASO gained 13.5% on the day. It has reached
some resistance from the micro downtrend since May 24, and is down
with the market this morning like most stocks. For there to be
continuation from yesterday, it would need to get above yesterday's
highs of $7.87. The next resistance area beyond that would be the
It is interesting to note that homebuilders (NYSEARCA:XHB) didn't
really participate in the bounce back as much as you would have
(LEN) look very unhealthy.
Inverse 20+ Year Treasury Bond ETF
(NYSEARCA:TBT) is now over $70 and continues to look good for
higher prices. Could we be seeing the early stages of the great
rotation? The bullish bond ETF (NYSERARCA:TLT) conversely looks a
lot lower in the coming months.
Metals continue lower. Gold (NYSEARCA:GLD) recently got rejected by
$136.50-137.50 and is now heading back toward very important
support. We've had multiple inflection points for adjustments
recently: the $161 pivot on February 11, and then the $149.50 pivot
on April 12. If you are still involved, $130.50ish is the next