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Minyanville's T3 Morning Market Call: Focus Remains on Macro and Forex as Equities Rest


Early in the week, it was all about the banks. Yesterday it was all about the refiners.

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US stock futures are down slightly Friday morning ahead of the first options expiration of 2013. We could be headed for another slow session and traders often choose to take a step back ahead of OpEx. Finance ministers and central bankers from the G20 countries are set to meet in Moscow amid rising currency tensions, and there is a triumvirate of US economic data today with the Empire State Index, industrial production, and the University of Michigan consumer sentiment reading.

Futures are climbing back to near the flat line Friday morning after being down overnight. The focus lately continues to be on the FX markets as we pay closer attention to the rhetoric from the G20 meeting. All in all, the move that those caught in the yen to the downside, long ProShares Trust II (NYSE:YCS) was pretty impressive. The euro also just corrected a bit as that was a tradable move both ways. The last targeted short came when many speculated that ECB President Draghi needed to talk down the euro headed into the ECB meeting in early February.

With all this hoopla around currencies, the S&P (INDEXSP:.INX) is hovering near highs of the year using the 8- to 21-day moving average as a nice road map to navigate. Indices didn't do much this week, but there was a lot of individual stock action for swing traders to stay involved with and to add cash flow tiers based on the chart pattern. There was also nice opportunity to have less size on overnights and to just target different names and groups based on rotation.

All in all, there has been a lot to like in 2013 if you trade what you see, and not what you think. There is no room for stubborn opinions in trading. The SPY upside range continues. The 8-day stands at $151.62 and pivot resistance at $152.61. Early in the week it was about the banks. Yesterday it was about the refiners.

Metals continue to be weaker. We talked about the Wedge/Triangle pattern in Gold and Silver coming to an apex around 2/07. I was leaning long, but it resolved to the downside. If you just used the charts without opinions, you could've been on the right side of it, but metals are hard to day trade. If you were leaning long, you could have been stopped out of SPDR Gold Trust ETF (NYSEARCA:GLD) around $161ish (for a loss like me), and if you were quick and flexible you could have looked to initiate shorts.

This morning the GLD sliced through the last support and is down to $156.37. If this gap to the downside doesn't get filled quick, your next spot of support comes in around $154 with a major, major level at $148-150.

Tech has been mixed, but there have been really nice moves in stocks that reported strong earnings like Netflix (NASDAQ:NFLX) LinkedIn (NASDAQ:LNKD), Google (NASDAQ:GOOG), Yahoo (NASDAQ:YHOO) eBay (NASDAQ:EBAY), (NYSE:CRM), SanDisk (NASDAQ:SNDK).

Apple (NASDAQ:AAPL) is in a tricky spot but gave some opportunity last week. It needs to hold above $463ish in order to perhaps take out the long-standing downtrend that has controlled the stock since $700 or when it broke its 21-day back around $681 months back.

While it's hard to find compelling setups right now, there are two lower-level, highly-shorted stocks that have decent setups: OpenTable (NASDAQ:OPEN) and Deckers (NASDAQ:DECK). NFLX is the most exciting example of what can happen with a highly-shorted stock when it gets in motion, and these could squeeze shorts if they can get momentum above key short-term technical levels.

I'm being a bit more tactical up here, holding some swings but taking trades a bit more frequently.

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Scott Redler is long GRPN, MSFT, BAC, GE. Short SPY.
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