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Minyanville's T3 Morning Market Call: When Will Market Face First Gut-Check of 2013?


There's a lot of movement in different sectors from day to day, there has finally been some two-way action. Yesterday a number of recently strong stocks pulled back.

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S&P (INDEXSP:.INX) futures are off four to five handles this morning as the Fed starts its two-day FOMC meeting. Recently the market has seen a stair-step move higher, a move that hasn't seen any real "gut check" type days. For this type of composure to continue, traders would like to see S&P 500 ETF (NYSEARCA:SPY) hold $149.30-149.50 hold. The 8-day moving average is now at $149ish.

There are a few factors that make me a bit cautious heading into the next few weeks. We are seeing some high RSI readings and February is a historically bearish month. A retest of SPY $148.11 or S&P 1474 can't be ruled out. Pivot resistance now stands at $150.30.

There's a lot of movement in different sectors from day to day, and we are finally starting to get some two-way action. Yesterday we saw a number of recently strong stocks pull back.

The red hot 3D printing sector saw its first blow-off of 2013 after some loose faulty upper-level action. 3D Systems (NYSE:DDD) sliced upper supper around $67.18 on its way to a 13.86% loss, a good example of why you need to have upper level stops as well as lower level stops. The stock now needs time to repair.

Stratasys (NASDAQ:SSYS) reversed on January 22 and then yesterday sliced its upper range. The stock took out its 8- and 21-day moving averages, giving some intermediate trend traders the exit door. These two stocks will need some time.

Tech stocks continue to take turns being "in-play."

VMware (NYSE:VMW) is down big, around 18%, this morning after a weak earnings report. This is a prime example on why I don't take stock into earnings. If I want to be involved, I typically use some type of option strategy so risk can be premium paid. Lately a call spread or put spread has been my strategy of choice. Big support to watch is $79.50-81.50.

Yahoo (NASDAQ:YHOO) is up over 3% this morning after beating earnings estimates last night. New CEO Marissa Meyer, the influential former Google (NASDAQ:GOOG) exec, has done a great job with the company since taking over, and it could be headed for a strong year. In the short-term, though, it's a bit tough to chase this rally.

Seagate (NASDAQ:STX) is down around 6% after reporting its numbers.

Google is hanging tough. Staying above $737-740 would be healthy, then perhaps we could get a momentum move through $758-760.

Baidu (NASDAQ:BIDU) is looking better. It's not showing leadership, but it's had a nice move off the lows and has a nice flag-type pattern. The next buy price is $112ish, and then a blast above the 200-day could recapture some more macro bullish composure. That next resistance action area stands around $114-115.

Apple (NASDAQ:AAPL) finally had a small tradable bounce, which has been a rarity for this stock recently. A move above $453-456 with some power would help get this out of the danger zone. Let's see if it can get a rare day of follow-through day of upside.

Amazon (NASDAQ:AMZN) had a pretty nasty day ahead of earnings, which will be released tonight. This has been one of the chosen ones during the recent run. I will trade the stock after the report. I'm not looking for an options play, but I would use some type of spread as premiums are high.

Netflix (NASDAQ:NFLX) took the day off after a huge earnings move. The stock gave an upside "Red Dog Reversal" for a short. The next pivot is $160.79 and then $155ish.

Facebook (NASDAQ:FB) got back to 2013 highs ahead of earnings tomorrow. It has been a nice trading vehicle since igniting on the November 14 IPO share lock-up expiration. Measure your commitment into the report as expectations are now high.

LinkedIn (NYSE:LNKD) had some nice follow through yesterday. I've been focusing on this one over the past week, and it has been a nice move from about $116-127. I did trim some yesterday but still have some. I believe LNKD has the characteristics of a potential $140+ stock this year. Use your time frame.

Sometimes with laggard stocks, one man's trash is another man's treasure. Zynga (NASDAQ:ZNGA) played that role yesterday, waking up in a big way on big volume. Perhaps we could see $3.20 this week.

Banks have been basing. I think you could watch this group for clues on short-term direction.

The Financial Sector SPDR ETF (NYSEARCA:XLF) is above the 8-day moving average. If it closes below that moving average, it could see a quick move down to $17.02ish. A small composure change in this ETF could weigh on the market a bit.

Goldman Sachs (NYSE:GS) has a good pivot to watch around $143. The stock has reemerged as a leader in the sector, and could be important for the group's short-term fate. The 21-day is around $138.

Bank of America (NYSE:BAC) is still trying to base around the 21-day. The recent floor is $11.02-11.40, and the 50-day is moving up to around $10.84.

The Homebuilders ETF (NYSEARCA:XHB) got a little sloppy yesterday. Let's see if that continues or if its just another day of basing. The 8-day moving average is at $28.51ish.

Metals are getting a small bounce this morning, but this group has been a big disappointment for me. Moving averages are starting curling down. I would only get more excited if the Gold ETF (NYSEARCA:GLD) ignites and closes above $161.60-162.00. The two-day Fed meeting this week could wake up the group, but I wouldn't count on it.

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Scott Redler is long WFC, AAPL, LNKD, GE, BIDU, TBT, GE, DBC, MGM, ZNGA. Long LNKD 125 calls, short LNKD 135 calls. Short SPY.
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