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The T3 Morning Market Call: What Could Derail the Market's Historic Run?

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This relentless move higher is now starting to frustrate even the bulls.

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Futures are basically flat as markets around the world see some profit-taking. Some are up, some down, but there are no big standouts. The S&P (INDEXSP:.INX) remains very extended from both short- and long-term moving averages, and there seems to be little that troubles the market right now. Bad economic data means more QE, and good data means the recovery is taking hold. Either way, the Fed has created an environment where equities are the best house in a bad neighborhood.

This relentless move higher is now starting to frustrate even the bulls who might have trimmed and trailed themselves out of many quality positions that continue to move a lot higher (like me). I can't imagine how those rolling up their shorts since the start of the year are feeling. I did it one day, yesterday, and I feel like I hate the world.

Anyway, this extended upper range has new support at micro support around 1645-1650 with a bigger spot at 1636. New pivot resistance is 1661. One of these days this market might take a rest, but until we do a drastic break out failure, or close below a prior low, this could continue.

Banks, transports, homebuilders, and industrials made new highs as well yesterday. These groups have been providing leadership and gave some additional entries this week.

The agricultural space and refiners have lagged, so I will go over potential opportunities in them if the market continues to rotate.

Oil Services ETF (NYSEARCA:OIH) looks interesting at these levels as rotation continues and this is a laggard group that has a nice setup. The longer it stays above $43.40, the higher probability we could see a move through the major resistance level at $45. Intermediate Target No. 1 stands at $47.20. Target No. 2 at $49.60.

Valero (NYSE:VLO) is trading in an descending channel since March 5. The stock looks like it was trying to break out of this range. It needs to break and close above the $40-40.50 area to get some momentum.

Tesoro (NYSE:TSO) saw a nice three-day move that pushed the stock into an intermediate downward trend line since March 5. It could need some more time but a move through $58.50 with volume could bring in some buyers.

Exxon Mobil (NYSE:XOM) has a short-term up trend in place since April 17 when the stock saw a nice bounce off the triple bottom level. After seeing a controlled pullback into its 21-day where it held, the stock resumed to the upside with two up days. It has cleared some resistance levels on its way up. Next level for it to reclaim is $91.85

The Ags:

The Agribusiness ETF (NYSEARCA:MOO) is flagging above its 100-day moving average after seeing a nice move off of lows of $51.43 in April. It could see the next resistance level of $55.87 if the bull flag resolves to the upside like it typically does. The breakout level stands at $55.30.

Mosaic (NYSE:MOS), after a three-day sell-off, found some support at its 21-day moving average as its been holding this key moving average for the last two sessions. The longer it holds the 21-day at around $61.16, the higher probability we could see it resume to the upside.

Monsanto (NYSE:MON) saw a clean breakout at $108.63 yesterday after consolidating at highs for a week or so. The stock put in new pivot highs at $109.33, use this as the new point of interest to trade against, it could see some continuation to the upside as it was a nice Day 1 move and the stock closed at highs.

CF Industries (NYSE:CF) has a short-term uptrend in place since $170.53. It pulled back into this trend line and into its 21-day moving average yesterday. It could be a buyable spot as the stock has been acting better and it has some room to the upside.

Potash (NYSE:POT) pushed into its micro resistance of $43.90 and failed yesterday. POT has seen a big run off of lows since April. If it couldn't break above the micro resistance, its prudent to see if it holds the micro support of $42.63 as a break below this could bring out some sellers.

Tech remains mixed.

Google (NASDAQ:GOOG) continues to be an animal as it trades at historic highs again. If you're still long, congrats, but it feels very extended.

Netflix (NASDAQ:NFLX) tacked on its fourth up day since the buyable pivots but is also very extended.

Priceline (NASDAQ:PCLN) has been knocking the teeth out of shorts, but I avoid this one generally.

Apple (NASDAQ:AAPL) broke $450.50 Tuesday and some jumped on shorts or got out of longs. Yesterday the stock couldn't hold its 50-day. I guess $420-422 is worth a look for some action if it sees that level. If it doesn't reclaim its 50-day fast, it could see a retest of recent lows.

Yahoo (NASDAQ:YHOO) broke above another pivot yesterday.

EBay (NASDAQ:EBAY) continues to work higher. There is some resistance at $58ish.

LinkedIn (NYSE:LNKD) filled its earnings gap for a quick trade and then came in hard. It has no set up now and needs some time.

Facebook (NASDAQ:FB) remains very weak and is an "avoid."

Microsoft (NASDAQ:MSFT) gave another buyable entry on its 8-day and looks good.. I believe we could see $37-$38 this year.

Intel (NASDAQ:INTC), after two down days, turned up and still looks buyable on dips.

Cisco (NASDAQ:CSCO) had a nice earnings report that has it gapping up. If it can stay above $22 it could see higher prices.

Metals continue lower. We've been discussing the weakness there. Everyone had some adjustment areas in the last few months.

Gold ETF (NYSEARCA:GLD) gave you an intermediate spot to make some adjustments on February 11 when it broke $161ish, then macro folks had some adjustments to make when it broke below $148.50 on April 12. Recently it bounced back and turned lower again. The next spot to make potential adjustments is $130.50, but it feels like $127.50 could be coming soon.

Tesla (NASDAQ:TSLA) is a very fast-moving vehicle. Tuesday it was a sell around $95 and then yesterday it hit $78.19. This morning it's back above $90ish. Make sure to know your risk when trading this using levels and not opinions.

(See also: The Tesla Model S Is the New Toyota Prius.)

I've been trying to hold several longs since the November 16 reversal that ignited this recent uptrend. I find myself down to only three now and am a bit frustrated.



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Scott J. Redler is long BAC MS ZNGA. Short SP.
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