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The T3 Morning Market Call: Market Out to Prove This Is More Than Just Reflex Bounce

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Biotech stocks such as Amgen and Biogen Idec perked up and showed some relative strength yesterday.

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Europe is basically flat, digesting a decent two-day snap-back; China continues to find some footing; and Japan is up another 2.97% as the 20% move off highs is proving to have been a great buying opportunity. S&P 500 (INDEXSP:.INX) futures are currently up 2-3 handles as this tradable move from the S&P 1560 area continues into some bigger resistance.

Yesterday we reached one of our firm's target zones of 1598-1606, a spot to take some risk off if you were just trying to catch some type of window dressing bounce. There is still some room to go higher, though. as the bigger zone is around 1618 (the 50-day retest). The line in the sand that the bears would want to defend after that goes up to 1628ish, which also closes the gap from June 20.

The action was a bit better yesterday as some leading stocks started to lead again. Several recent movers also continued up for the third day in a row.

Biotech stocks perked up and showed some relative strength yesterday.

Amgen, Inc. (NASDAQ:AMGN) is trying to build a base above its flattening 200-day moving average. After holding the new floor of $94-95 during last week's pullback, the stock showed some relative strength and rallied 3.34% to close back above its 100-day moving average. Although the stock has some room to the 50-day at around $103.27, it needs to build on to yesterday's strength to show some commitment.

Biogen Idec Inc (NASDAQ:BIIB), after finding support along its 100-day, broke out of the descending channel with impressive gains of 4.7% yesterday. The stock closed on highs, showing relative strength. It has some room to the 50-day at around $217-218 before it runs into some resistance.

ACADIA Pharmaceuticals Inc (NASDAQ:ACAD) has been one of the strongest stocks in this group as it held above the 21-day on the recent pullback, unlike most of its peers which were already back at the 100-day. After finding support along the 21-day, the stock registered 6% of gains yesterday, thanks to the early morning strength. Look for potential continuation above yesterday's highs of $17.96 for what could be a move back to highs of $20.

Celgene Corporation (NASDAQ:CELG) dipped below its 100-day last week, but quickly reclaimed this key moving average yesterday after seeing 3.13% of gains. Some upside follow-through today could help it break above the downtrend resistance that has been in place since May 14 and regain some upside momentum.

Stocks that have been acting well:

Tesla Motors Inc (NASDAQ:TSLA) continues to keep our attention recently as it did not only hold up well during the correction in the market last week, but it also has a compelling pattern that looks poised for a potential breakout above $107.13. The stock has been inching higher into this resistance, and if it gets above this short-term resistance, it could see a quick move back to highs at $114.90. TSLA broke out of the upper wedge pattern yesterday, which could be another buy signal.

Amazon.com, Inc. (NASDAQ:AMZN), after holding above the intermediate descending channel that it broke out of on June 7 with a potent move, has seen a nice two-day bounce back to $278 area. The stock looks like it could make new highs, but will have to take out resistance of $283-285 from current all-time highs.

Zion Bancorporation (NASDAQ:ZION), a regional bank, is a strong stock that has been holding up well and showing lots of relative strength. It has worked well to identify relatively strong stocks to stick with during the corrective tape. ZION built on to its recent gains and made a new highs at $29.19 yesterday. Some digestion above $28.20ish, where the 8-day lines up with some prior pivot highs, would be constructive for higher prices.

Wells Fargo & Co (NYSE:WFC), unlike higher beta names in the group that saw moves down to their 100-day moving averages, held above its 50-day and is now back above its 8-day and 21-day MA. WFC has been trying to build an upper level base. I believe the stock could look poised to make another leg higher if it can break above the current 52-week highs of $41.69 on good volume.

Gold (NYSEARCA:GLD) got hit hard again and closed near its lows. Although the metals have broken charts and need time to repair, GLD has reached an oversold level where risk-reward could be decent for a cheeky short-term long trade. The $115.50-117.50 level is another huge support area. If it gets above $118.90 you could get a cute long for cash flow.

Silver (NYSEARCA:SLV) has been crushed, but like GLD, I do think the $17.50-18.30 would be a better spot to test a bounce rather than add to shorts. We now have $17.86 as a short-term point of reference. The gap starts at $18.30.

The 20+ Year Inverse Bond ETF (NYSEARCA:TBT) continues to build an upper level base to allow its key short-term moving average to catch up. The longer it holds above breakout level of $70.50-71, the greater odds we could see higher prices moving forward.

3D Systems Corporation (NYSE:DDD) found some footing as some buyers stepped in at the 50-day to lift the stock up. It still has some resistance from its 8- and 21-day MAs at around $45.20, but the longer it stays above the 50-day, the higher possibility it could see some upside momentum perhaps up to the $48 resistance level.

BlackBerry (NASDAQ:BBRY) tacked on additional gains of 2.40% yesterday after recent strength. This stock has some room up to $15.30, where it could run into some resistance from the intermediate descending trend line that has been in place since January. A break above this trend line could put it back in motion.

At this point, it seems like the meat of the snap back has occurred, and now it's time for the market to prove that this has been more than just a reflex bounce. I'm not sure we've seen the "summer bottom" so I'm remaining tactical and taking trades in both directions at this stage. There are enough small signs to say that could have been it, but not enough for me to get back into portfolio approach. I want to be light and flexible in order to enjoy some of the summer months.



Disclosure: Minyanville Studios, a division of Minyanville Media, has a business relationship with BlackBerry.

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Scott Redler is flat.
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