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Minyanville's T3 Morning Market Call: German Data Lifts Futures, Takes Away Easy Trade


Groupon posted sharp gains yesterday ahead of its earnings results.

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Markets never want to give the "easy" setup. Most traders were hoping for a gap down to buy, and some for a gap down to cover remaining shorts. We closed below the 1340 level in the S&P yesterday, and that seems a bit more like a trap for now, but we will see how we trade in the first 30-60 minutes. Yesterday was a tricky day as we were mildly oversold, but not extreme. Stocks seem have been beaten enough to play for an oversold bounce, but were not turning up intraday.

Today the futures are pointing to a higher open; as I write, we are up seven to nine handles. Lately, shorting down opens has not worked -- neither has buying up opens. So give it some time for the trade to pan out in the first 30-60 minutes; see if stocks act well, and if indices continue to push in the first 30 minutes or lag. Also, see if they bring the indices in, and whether stocks act well to then enter for a oversold bounce-type trade.

S&P resistance at 1343-1347, the recent pivot low, will be the first obstacle. The next area is 1348-1352, and big resistance that contained last week's rally attempt is 1360-1363.

S&P support is yesterday's low of 1336, the next level is a pretty big one at 1318-1322, and then the measured move of the head & shoulders top is down at the 1295-1305 area.

See how the banks react to Jamie Dimon's JPMorgan (JPM) shareholders meeting. JPMorgan seems beaten enough to buy for a scalp long and a longer term trade.

Some high beta names were mixed yesterday.

Apple (AAPL) was weak; see if it holds up or if the stock fades at the open. If it goes negative, the real test will be $555-557.

Gold (GLD) also keeps heading lower. Yesterday's pivot low is $151, then major support is back from December 29 at $148.27. It's hard to short here, but buying hasn't worked.

Groupon (GRPN) posted sharp gains yesterday ahead of its earnings results, and accelerated those gains after the report, in which it beat on the top and bottom lines. Groupon was up 18% yesterday, and has added more than 25% after-hours. Zynga (ZNGA) has also perked up based on the Groupon results and upcoming Facebook (FB) IPO. The stock is up almost 6.5% pre-market.

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Scott Redler is long SPY. Short AAPL
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