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Minyanville's T3 Morning Market Call: First Jobs Report of 2013 Solid, but Market Needs More Rest


Apple remains weak, and solar stocks erupted yesterday on news that Warren Buffett-owned MidAmerican Solar is buying two California solar projects from SunPower.

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US stock futures are slightly higher Friday morning following the first nonfarm payrolls number of 2013. The report revealed 115,000 jobs were created in December, 5,000 more than expectations, and unemployment rate remained steady at 7.8%. The numbers were solid, but perhaps not enough to trigger another potent leg higher after an impressive start to 2013 for the market. Stocks may need another day or two of rest before we feel comfortable chasing new long positions.

The Fed minutes yesterday brought a curveball, revealing several voting members of the FOMC believe QE3 could be cut off by the end of 2013. The idea spooked investors a bit as stocks and commodities sold off while the dollar surged on the news. Precious metals are opening lower this morning, and the key level to watch in the Gold ETF (NYSEARCA:GLD) is $158.39. The ETF traded below that level this morning but is starting to firm up a bit ahead of the open. The Silver ETF (NYSEARCA:SLV) is currently set to open below its key pivot low of $28.65.

Apple (NASDAQ:AAPL) remains weak. The macro chart is bearish and recently the stock has shown relative weakness to the indices, so it's important not to show favoritism just because it's AAPL. While the market ticked slightly higher on the jobs report this morning, AAPL plummeted pre-market and is now set for a lower open. The gap from Wednesday should hold, in my opinion, if the psychology of the AAPL trade is going to change. That key area where the gap starts is $532-535.

Solar stocks erupted yesterday following news that Warren Buffett-owned MidAmerican Solar is buying two California solar projects from SunPower (NASDAQ:SPWR). When Buffett wants to buy in, investors perceive value, and the entire sector lifted on the news. SPWR, naturally, was the standout, finishing up 48%, but other names in the sector like First Solar (NASDAQ:FSLR) also perked up. Solar stocks are opening lower this morning, and it will be key to see how much of yesterday's move holds in the sympathy names. Momentum traders will likely continue to watch the solar stocks.

Continue to watch the banks, which may be a little bit extended now after New Year's gap ups. Bank of America (NYSE:BAC) hit $12 Wednesday, 20% above the $10 buy price that we hounded on our subscriber products Off the Charts and the Price Point Sheet. There is that big gap to fill, and the stock is extended off its short-term moving averages, which can often act like magnets. A re-test of the previous range would be healthy before more potential strength in 2013.

The market has been volatile for the past few weeks surrounding the fiscal cliff negotiations, and it may be time for a little bit of rest. Yesterday we got a consolidation-type day, and today's jobs report doesn't look like it is going to trigger a big move. In my opinion, the prudent approach now is to take some profits on short-term trading positions and wait for pullbacks to buy.

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Pete Renzulli has a position in UAL.
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