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Minyanville's T3 Weekly Recap: Fast Start to 2013 Takes S&P to Highest Levels Since 2007


The banks built on their recent strength today while Apple finished the day down.

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The S&P 500 (INDEXSP:.INX) surged another 0.45% Friday to cap off the index's biggest weekly gain since 2011. Today's rally also took the S&P to its highest levels since 2007. If the first week is any indication, 2013 could be a big year for stocks. One catalyst for today's rally was a slightly better-than-expected non-farm payrolls number, which economists hope will set the stage for robust job growth in 2013.

The strength in the indices has been especially impressive when you consider that the market's most influential stock, Apple (NASDAQ:AAPL), remains very heavy. AAPL finished the day down 2.8%, easily filling the gap from Wednesday. As Scott Redler noted in the Wall Street Journal last month, the psychology has changed considerably for the one-time market leader, and it will be very important to see if it holds $501.23 going forward.

The banks built on their recent strength today. Bank of America (NYSE:BAC) seems a little bit tired and in need of a rest, but did surge into the close to finished 1.3% higher on the day. Other stocks in the sector were even more impressive today: Goldman Sachs (NYSE:GS) +2.7%, Citigroup (NYSE:C) +2.5%, and JPMorgan (NYSE:JPM) +1.8%.

The precious metals followed through to the downside today after yesterday's surprising Fed minutes that indicated QE3/4 may end sometime in 2013. Gold (NYSEARCA:GLD) was sharply lower in the pre-market before paring some losses into the close, but was weak during the first half of the session. However, a late day surge after the close of pit trading helped mitigate some of the damage. GLD finished the day down 0.5%.

Google (NASDAQ:GOOG) is staking its claim as the as the new leader in high beta tech land. The stock today pushed higher through a macro wedge pattern and finished up 2.0%. GOOG has been impressive in shrugging off its Q4 earnings miss that was leaked in the middle of the day. If the market can hold up, I believe you could see GOOG at all-time highs around $775 in the first half of 2013.

Amazon (NASDAQ:AMZN) remains very constructive, if unspectacular. The stock used to whip around wildly, but more recently has methodically held in its upper range. Previous all-time highs are $284.11.

Washington delivered the market a pleasant surprise when they worked out a last-minute, partial fiscal cliff compromise, and the subsequent rally has been impressive. We are starting to see some exuberance come into the market this week, and that is when you have to be careful. While we maintain a bullish stance on the market for 2013, you have to know when to be aggressive and when to take your foot off the gas a little bit. Right now, with many stocks extended, is not the time to take outsize risk.

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Pete Renzulli is short C, SBUX, UAL.
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