Archive for March, 2013

Market Shifting to Risk-Off?

What a choppy week.  The Cyprus banking crisis rocked the market early Monday morning, knocking the S&P futures down to a low of 1529.50.   But the bulls quickly regained control, as the market rallied back to close strong.  Tuesday saw a quiet morning, followed by a wicked selloff in the afternoon as more concerns materialized in the Cyprus situation.  We again found support in the low 1530s, putting in a potential double bottom.  We had a strong rally on Wednesday (despite poor earnings from FDX),  but then an earnings warning from ORCL Wednesday evening, led to a bit of a Tech-wreck and the market closed weak again on Thursday.  So where does the market go from here?

From a technical perspective, the trading levels are shaping up nicely.  Key support and key resistance is well defined.  The market continues to struggle in the 1550 area, as traders have been using rallies into that area to lighten their positions.  The market found support in the 1530 area on Monday and Tuesday, and that area should provide some initial support again.  But trading action in the individual stocks is a little more concerning.

The market appears to be shifting to a “risk-off” trade, as the financials and cyclicals are starting to show weakness, while defensive names continue to be strong.  Money is moving into the gold miners as ABX, GG, and NEM are starting to break out after forming some nice bases.

Bottom line, it is critical that this market hold the 1529.50 low that we set on Monday.  If that level is breached, we could be in store for another test of 1500.

Here are the support and resistance levels to focus on:

E-mini

Price

Significance Level Reason
1558.75 ******* High of move
1554.25 *  
1550.75 **** Thursday high
1545.00 *  
1539.00 CLOSE  
1536.50 *** Wednesday/Thursday lows
1531.75 * Tuesday low
1529.75 **** Monday low
1519.75 ***** March 3 low

Tech Wreck – Premarket Stock Talk

We have a bit of a tech wreck this morning as a number of tech stocks are trading down on the disappointing ORCL and JBL earnings reports.  LULU and GES also reported.  Premarket trading analysis:

Yo-yo Market – Premarket Stock Talk

The market continues to bounce around on headlines from Cyprus.  We are finding great support in the 1530s, but continue to find resistance in the 1550s.  Will that pattern continue to hold?  Earnings from FDX, ADBE, WSM, LEN, GIS.  Premarket trading analysis:

Stock Chart of the Day – WAG

The doctor has written the right prescription for an increase in the price of WAG stock.  In addition to announcing better than expected earnings by $.02 (.96 vs. 94), the company announced a 10-year pharmaceutical distribution deal with ABC.

After trading up modestly in the pre-market, WAG opened at 43.22 and never looked back.  The stock roasted shorts, as it blew through the 43, 44, and much of the 45 handle in early trade. WAG exceeded the June 2011 high of 45.34 and traded as high as 45.80 before some real profit taking stemmed the tide.

So what now for WAG, after this very unusual move for this normally mild-mannered issue?

First of all, the 45.80 high from today may provide some initial resistance, as investors who chased today’s early rally, may be targeting an exit point at that level.  Above that, traders will need to reference back to the September 2007 high for the next possible resistance point at 48.09.  For now, the small gap between today’s low (43.20) and Monday’s high (42.71) may be laden with large bids as bloodied long-term shorts and bruised short-term players attempt to wiggle out of their positions.

Here are the key levels to focus on for tomorrow:

WAG

Price

Significance Level Reason
48.09 ****** September 2007 high
47.25 **  
46.63 *  
46.00 * Psychological resistance
45.80 **** Tuesday high
44.74 CLOSE Key swing level for Wednesday
43.93 *  
43.50 *  
42.71-43.10 ****** Monday high/Tuesday low

Shrugging It Off – Premarket Stock Talk

If you slept in yesterday, you missed the pullback, as the market quickly shrugged off the news out of Cyprus.  AAPL led the charge higher and continues to show strength this morning.  Earnings from WAG, DSW.  Warning from LULU.  Premarket trading analysis:

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