S&P futures are basically flat this morning and the focus from traders this morning is on the banks after earnings reports from JPMorgan ( JPM ) and Wells Fargo ( WFC ). The banks delivered solid reports this morning and are now firmly higher after some early indecision. WFC is the stronger of the two, up 1.8% at the time of this writing, while JPM is up about 0.7%. On the flipside, United Parcel Service (UPS) issued a warning on its numbers and was down more than 5% pre-market.
Yesterday the market opened sharply higher thanks to an afterhours Q&A session from Chairman Ben Bernanke at the NBER conference in Boston in which he struck a very dovish tone. The market had no intention of giving back those gains during yesterday's session and the S&P 500 (INDEXSP:.INX) and Dow (INDEXDJX:.DJI) made new all-time closing highs.
Suffice to say, the market has seen an impressive comeback from the June 24 low of 1560. When the bounce began, people chalked it up to end-of-quarter window-dressing. When it continued with a series of gaps, people said the rally had no validity without intraday momentum. But now here we are. Price action will always be king.
The first technical hurdle for the S&P was reclaiming the 50-day moving average, which it did on July 5. Now the index, after rallying 7% in just over two weeks, is just a stone's throw away from the 2013 intraday high of 1687. At these levels with the oscillator overbought and stocks stretched from their short-term moving averages, it's hard to initiate new buys. However, that doesn't mean the market is a short.
Amazon ( AMZN ) continues its breakout to new all-time highs as it has gained over 4% just this week and tagged the $300 mark yesterday. The move this week for AMZN has been very impressive but at this stage, the move is getting long in the tooth, making it hard to initiate new positions here.
Google ( GOOG ) pushed up to new all-time highs in yesterday's session, finishing up 1.57%. This stock has seen a solid move out of the upper level wedge from our most recent buy price of $891-892. Use yesterday's high of $920.81 as your new point of reference.
LinkedIn ( LNKD ) closed yesterday up 4.34% as it broke out of the recent range above $193. Today could be considered day one of perhaps a new leg higher. The next potential resistance level that comes into play is the all-time high of $20.
Netflix (NFLX) has been on the move this week as it broke out of the upper level wedge pattern. This stock rested yesterday as it absorbed the recent gains. Holding above $236 would be constructive going forward. It was upgraded this morning, which could help it get moving higher again.
The Homebuilders Sector ETF (NYSEARCA:XHB) finished yesterday up 3.59% as it saw a large gap and go to the upside today. Yesterday's move could reverse the recent downward pressure that has been building on this sector ETF. Holding above yesterday's low of $30.79 would increase the validity of today's move.
First Solar (FSLR) perked up yesterday, finishing the day up 4.08%. There is a lower level pattern that could see follow-through above $47.60 but the trade may need more time to develop.