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Minyanville's T3 Morning Market Call: Market Shrugs Off North Korea Nuclear Test, European Weakness


Tech stocks continues to be mixed, and some European banks had a big day on restructuring news.

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US stock futures are basically flat this morning as the market continues to hang higher in this upper range. Yesterday we got some weakness in European markets and another nuclear test from North Korea, both of which could have spooked investors, but the market is so far taking them in stride. Traders will be looking ahead today to a barrage of Fed governor speeches, several by quantitative easing detractors. Also, the president will deliver the State of the Union tonight, so be aware of sectors that could be in play based on his rhetoric. The solar stocks woke up yesterday, for example.

(See also: Pre-Market Primer: US Gives Japan Green Light to Fight Deflation; Fed Speeches and State of the Union on Tap.)

Currencies have become more of a mainstream focus recently, largely due to the large down move in the Japanese yen. If you have been trying to pick a bottom in the yen, you have been left frustrated. G7 members and central bank governors yesterday issued a statement saying they would not target exchange rates, which could allow the yen to continue to bleed lower. I am not in the business of trying to pick bottoms, but I will be watching the CurrencyShares Yen Trust (NYSEARCA:FXY) for a potential complexion change.

Rather than focusing on trying to pick tops or bottoms, continue to follow the trend. The trend in the S&P 500 ETF (NYSEARCA:SPY) remains to the upside despite the quiet action. SPY micro support is $151.38 with the 8-day moving average at $150.99. The 21-day MA stands at the lower end of this upper range around $149.48. Pivot resistance stands at $151.90ish then the next level is $152.40, with a bigger level at $153.25.

Tech continues to be mixed.

Apple (NASDAQ:AAPL) did go from $435 to $485 in a very tradable fashion over the past few days after the David Einhorn lawsuit news. Tim Cook gives his keynote address today at 10:15 a.m.; we shall see soon if this was just an oversold bounce or whether it could be sustained. There is some micro support at $475, but the line in the sand for commitment is $464-466. Resistance stands at $484.94, and if we get above that level then the next resistance is around $500.

Google (NASDAQ:GOOG) took the news in stride that executive Eric Schmidt will be selling half his shares. Let's see if it could continue to hold above recent breakout zone of $774-777. Dips have so far been buyable.

Amazon (NASDAQ:AMZN) is getting weaker as it closed below the 50-day MA. It will be interesting to see if it could get downside follow-through. Perhaps additional shorts could be put on if it breaks below $256.60.

Netflix (NASDAQ:NFLX) is basing higher and still looks good. The stock needs to continue to hold $170-173 for it to be able to get back in motion above $182.05, in my opinion.

eBay (NASDAQ:EBAY) and Yahoo (NASDAQ:YHOO) are slow but still trending higher.

VMware (NYSE:VMW) hasn't been able to bounce since its weak earnings report. The stock is hovering near big support, so use that $76-77 level as the major pivot to trade long or short against.

Banks still hang around. Some European banks had a big day on restructuring news.

Citigroup (NYSE:C) is still basing. The stock needs to get above $43.45ish on heavy volume for me to get excited about it.

Bank of America (NYSE:BAC) needs to clear $12ish for a shot at highs on the year.

Goldman Sachs (NYSE:GS) continues to ride its 8-day moving average to new highs. Use this stock as a bit of an indicator for the broader market.

LinkedIn (NYSE:LNKD) has been explosive since earnings. The new pivot high to watch is $158.90 and support stands at $149. After such a big move, I would like to give it some time to base before doing anything for more than a scalp now.

Facebook (NASDAQ:FB) has been under pressure since earnings after failing to meet new lofty expectations. I've been getting a bit chopped up trying to buy support before a clear signal. FB is down 2.7% on a Bernstein downgrade. A gap starts from January 2nd at $27.40 and gets filled at $26.99.

Zynga (NASDAQ:ZNGA) has been a nice treasure for trash after earnings on the clean break above $2.75-2.85. The stock is trying to fill a gap that's open up to $4.50ish. I would take trades along the way and not let my expectations get out of hand with this type of stock.

The 3D printing group has been on fire over the last year. The biggest name in the sector is 3D Systems (NYSE:DDD), which continues to hang up near highs. As long as it holds the $65 area I think it could continue higher. Stratasys (NASDAQ:SSYS) is a little bit thinner and feels like it needs more time. The IPO in the group from last week was a huge hit as it was priced at the top end of its range at $18 and traded all the way up to $33.60 on the second day of trading.

(See also: Will the 3D Printing Sector Be the Next Amazon Story?)

Among the oil stocks my favorite set-up is in Chevron (NYSE:CVX), which has a nice set up if it can clear $116ish.

The precious metals are not really responding to the North Korea news. New support stands at $159.24. Let's see if tries to fill yesterday's gap that starts at $159.98. The metals have been a very frustrating spot for traders. In order not to get shaken out, you might have to take a longer-term view with the group, but I don't have conviction in either direction right now.

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Scott Redler is long MSFT, AAPL, C, FB, CRUS, ZNGA, BAC, MGM, GE, TBT. Short SPY.
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