The financials continue to lead the market, with Goldman Sachs making new highs again today.
My firm is starting to run out of ways to phrase it, but this market continues to grind higher. Another gap up was bought this morning after S&P futures were down as many as seven handles pre-market, and the index finished narrowly positive. In the end, all major indices finished within 0.1% of the flat line as we head into the first 2013 monthly options expiration tomorrow.
Typically traders like to take a step back on options expiration due to potential pinning action that is often tough to navigate. I think that being cautious would make particular sense given where we are in the market. While we like to follow trends, it's hard to initiate new buys at these levels without a pullback. Every time it appears that we are starting to pull in a bit, a gap down gets bought or the market reverses back to the upside. As a trader, you have to be patient enough to sit on your hands at times, and have a keen eye to identify the sector rotation.
The financials continue to lead the market, with Goldman Sachs (NYSE:GS) making new highs again today. The company has re-emerged as the sector leader after earnings, and tacked on another 0.9% today. JPMorgan (NYSE:JPM) also showed resilience after yesterday's bearish candle, erasing most of those losses in a 1.1% surge today.
Today we also saw some money rotate into the oil service sector as my firm discussed earlier today. We saw impressive moves today from stocks like Schlumberger (NYSE:SLB), Halliburton (NYSE:HAL), EOG (NYSE:EOG), and Pioneer (NYSE:PXD). This is just the latest example of the sector rotation that characterizes strong bull markets.
The 3D printers have been firmly on traders' radars over the past few months, and have become even more volatile in recent weeks. The sector has been on fire and was even touted by President Obama in his State of the Union address. But with a sky-high valuation, there are a lot of skeptics. Citron Research, a company known for issuing bearish articles on various stocks over the past few years, released a negative piece on 3D Systems (NYSE:DDD) today, causing downside momentum to increase before a late-day relief bounce. DDD closed the day down 4.36%.
Stratasys (NASDAQ:SSYS) has been the much weaker name in the sector. Since its bearish ascending channel in the stock last week, it has sold off around 12%, and dropped another 6.08% today. I wouldn't be initiating new shorts here, but these stocks look poised to give good, tradable two-way action for the foreseeable future.
Marc Sperling was all over BlackBerry (NASDAQ:BBRY) on its gap down this morning. He Tweeted that he liked it early, and bought it. The stock went from negative to finish the day 7.79% higher.
Keep things light on options expiration Friday, and we'll get ready to attack the market again on Monday.
Disclosure: Minyanville has a business relationship with BlackBerry.
Scott Redler is long GRPN, MSFT, BAC, GE. Short SPY.