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Minyanville's T3 Morning Market Call: Market Looks to Bounce Into Holiday Weekend


Apple led the way, Google hung on, and Microsoft was battered and bruised.

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Futures were all over the map last night as markets are trying to figure out if the European Summit went well. Will they "print, print, print"? Will Greece leave the Union? Will Spain's banks fall apart with Italy waiting in the wings? How much will the US economy be affected? While we do read the headlines to be aware of what's going on around us, we place the most emphasis on the price action.

S&P futures are turning up as the morning wears on, currently up six handles. Jobless claims will also likely help steer futures in one direction prior to the open. Yesterday we got the opposite type of reversal we saw Tuesday as the market absorbs the recent down move. Follow-through to the upside today would be extremely constructive for bulls.

All you can ask for as a trader is a little follow through. Tuesday the markets reversed to the downside late afternoon and then had some brief follow through for shorts into Wednesday. Yesterday, the markets reversed to the upside after holding the lower 1291-1295 recent pivot area. So far this morning, those who bought as we reversed higher and took positions overnight are getting rewarded. Add a few tactical strategies using relative strength, chart patterns, and discipline, and you can actually make money in the markets.

The question is, can we buy them higher (which hasn't proved so rewarding since we entered this corrective process)? S&P resistance stands at 1325-1328 (Tuesday's high), then there is a small spot at 1336-1338, and the next major area is 1343-1345.

Apple (AAPL) helped to lead the way. If it can clear and close above $573-575, I think it will help breed some confidence. Typically you want to see a 30-60 minute close above it to show commitment. A daily close above it and next short term resistance is $587-592.

Priceline (PCLN) also snapped back from its 100-day and is showing it might want to continue through its descending channel. The pivot is $677ish.

Google (GOOG) held the 200 day again, so macro guys didn't need to change course. Getting away from the danger, back above $615 would be constructive.

Amazon (AMZN) gave two-way action and needs time, but seems OK.

Expedia (EXPE) broke out yesterday, and so did AOL (AOL). I did not trade them, though.

LinkedIn (LNKD) is also holding 100 day. It's a bit sloppy but still in the game when the market gets better.

Baidu (BIDU) is weak but trying to show signs of a short term bottom for active traders. If it can clear a lower pivot, perhaps try some around $122.50ish.

Microsoft (MSFT) and Intel (INTC) have been battered and bruised, and there is no real pattern except buying vs. yesterday's low.

Facebook (FB) showed the first day of strength yesterday. I guess you can now trade it long vs. $30.94. It has room to $33.59 and if it can get above that, perhaps $36ish.

I also bought Zynga (ZNGA) around $6.95 in sympathy; maybe we can see $8+.

Chipotle (CMG) has a descending channel and also acts well. See if it can clear and hold above it $406-408.

Banks held their recent pivot low, and they have a bit more room to bounce if the market hangs in. They were stronger on Tuesday, and then gave nice cash flow as they went positive yesterday.

Example: JPMorgan (JPM) actually did not trade below Tuesday's low, so buying into support made sense. Now can you add above $34.58 for additional gains back to $35.50-36ish.

Casinos have a similar pattern (perhaps our banking system and casinos are starting to move into the same sector after JPMorgan's debacle). Most held pivot lows and have some room to bounce. Nothing worth listing as a compelling long with the other opportunities we have out there, but I may look for a little trade with Las Vegas Sands (LVS).

Example: Las Vegas Sands held above $45.66, so it's worth holding if you're long. The question is, can you add through $49-49.25 for a bounce back to $51-53?

Gold (GLD) held $148.60 again and bounced off lows. It need to see if it makes a lower high. I'm avoiding. Miners were really strong yesterday.

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Scott Redler is long JPM, ZNGA, AAPL, LVS, MSFT, FB.
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