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Minyanville's T3 Morning Market Call: Greek Aid Deal Fails to Ignite Futures


Apple has resumed its market leadership role since the market reversal last Friday.

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US stock futures point to a flat open on Wall Street Tuesday after a $57 billion Greek aid deal was finally hammered out. The news initially pushed the euro and European stocks higher, but gains for the futures quickly evaporated. Based on the pre-market price action, it appears investors were expecting a deal to get done. Even more attention, if that's even possible, will now be given to the fiscal cliff negotiations.

When fiscal cliff negotiations began two weeks ago, there were encouraging signs that lawmakers may be willing to compromise, but little concrete progress has been made. Many pundits still believe we are in for another round of high-stakes brinksmanship in Washington that could spook the markets.

Taking a step away from the fiscal cliff, we have a data-filled economic calendar today. Durable goods orders for October will get things started at 8:30 a.m. ET, with economists expecting a 0.4% decline largely due to the effects of Hurricane Sandy. Durable goods orders rose 9.9% the prior month. Durable goods orders are somewhat cyclical, and a downturn in airline and defense spending could also weigh.

There will be two housing data points this morning, so keep housing stocks on your radar today. The S&P Case-Shiller home price index will be released at 9:00 a.m. and the Federal Housing Finance agency will release its house-price index at 10:00 a.m. The Homebuilders ETF (NYSEARCA:XHB) has been one of the strongest sectors in the market over the last year, more than doubling in price during that time.

As we have talked about for the past several trading days, digestion is a healthy step during a rally. Last Friday, November 16, we got a compelling reversal, then got follow-through the next day to validate the reversal. The following two days we got healthy rest and digestion before putting in another leg higher on Black Friday. Yesterday we finished negative on the S&P (INDEXSP:.INX) but nothing to cause concern for bulls.

The S&P low to trade against from yesterday is 1397, while 1386-1392 is bigger support. The longer we stay above that level, I believe the higher the probability we take out 1409 and travel to the 50-day moving average that stands around 1425. People are asking if me if we will see new highs by year end. At this point, nobody knows but we don't have to in order to make money in a calculated manner.

Facebook (NASDAQ:FB) continues to perform extremely well since its most recent IPO lockup expiration. The expiration released 800 million new shares into the public float, representing 35% of outstanding shares, and many expected the flood of supply to weigh on the stock. Instead, shorts were squeezed on that day and FB hasn't looked back since. After surging more than 8% yesterday to enter its large earnings gap, it is following through to the upside this morning. Sterne Agee upgraded Facebook to a $32 price target from $26 this morning, and the stock is currently 2.3% higher pre-market.

Apple (NASDAQ:AAPL) has resumed its market leadership role since that market reversal last Friday. The stock pulled back $200 (28.5%) in less than two months but has snapped back quickly over the last week. The stock was set for another higher open this morning before pulling back slightly around 8:30 a.m. The next major resistance test for AAPL will be its 200-day around $598.

During holiday shopping season traders used to watch at brick-and-mortar retailers, but in the evolving retail world, it's two Internet retailers that are in focus: Amazon (NASDAQ:AMZN) and eBay (NASDAQ:EBAY). AMZN just completed its sixth straight up day after bouncing off its 100-day moving average, showing relative strength to the market. It closed above its 50-day yesterday; watch to see if the momentum can continue. EBAY was even stronger yesterday, rallying almost 5% to new 52-week highs.

In M&A news, ConAgra (NYSE:CAG) announced plans to buy Ralcorp (NYSE:RAH), the nation's largest private-label food manufacturer, for $90 per share in cash. The $6.8 billion deal represents a 28% premium from Ralcorp's closing price yesterday. The new entity will employ 36,000 people and have annual sales of about $18 billion. CAG is around 6% higher this morning on the news.

As we get close to the final month of the 2012, opinions about 2013 are starting to be presented by prominent market analysts. IBD founder William O'Neil thinks we are a few years away from an upside super cycle! The old-school father of technical analysis Ralph Acampora thinks macro charts look bullish as well. Then you have some hedge fund smart guys saying 2013 will look like 1937 (look out below). For me I will measure the action as it takes place. Right now it's been profitable to own stocks again since November 16. I do think you need a long term macro plan, but I will focus on the intermediate trend action. Right now I'm trying to stay with a portfolio approach using a tier system. Everyone operates on his or her own timeframe.

Here is the link to Scott Redler's Bloomberg appearance from November 20 - Redler: Bears to Make Stand at 1403 to 1408 Area and here is the link to yesterday's appearance Auth: Now is Not the Time to Stick Your Neck Out.

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Scott Redler is long AAPL, BAC, FB, SBUX, QCOM, SLV. Short SPY.
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