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Minyanville's T3 Morning Market Call: Let Earnings Dictate Action


A slew of earnings bring mixed results.

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We have a slew of earnings, and we have had a lot of mixed results. Earlier this week, we briefly penetrated the ascending channel on the SPY, but we did not close below it. We are now back in that channel, but all that means to me is that we are getting some "fluff" from the end of the month. We are range bound, and we continue to be range bound. The key different is that I am not seeing much leadership, so it will continue to be a stock-specific tape.

Expedia (EXPE) is one of the big winners from earnings. It is trading around $52, and continues to hit new highs. I consider it to be a best in breed along with Priceline (PCLN), but we will have to see if it holds its gap before jumping in to buy. We might see some consolidation, and if that occurs, look to buy at $50.

I have been starting to talk about biotechs, and a good leader that I look to is Amgen (AMGN). You could tell it was going to beat earnings, and it is up $2 again. It is just chugging along, but it may base. $80 is a good place to buy.

Starbucks (SBUX) is one of the big losers. It is trading below the 200-day moving average, which is something you never like to see and is an indicator of future activity. When you go back to the weekly, you see it has been basing in the $50-$55 level, and earnings appears to be the catalyst that will drop the price. I am going to watch and wait for the price action to dictate my future action.

High beta really lost some of its leadership during earnings season. Amazon (AMZN) did not do well with earnings again, but it is still right in the middle of its ranges. I still consider it be a safe buy at $215, but it needs to break its resistance at $225 and even reach $230 before it becomes a trigger buy.

Coinstar (CSTR) is another loser and seems to be following Netflix. It also fell below its 200-day and I would avoid it. Apple (AAPL) needs some time to digest, and may even be bear flagging.

You see some support in banks and oil stocks such as Exxon Mobil (XOM). Other sectors are starting to step up, and homebuilders continue to show strength as I will continue buy on pullbacks. Just be weary of sector rotation and be ready for new leadership. Keep focusing on earnings instead of the tape, and that will provide easier trades.

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Marc Sperlingis long: PCLN, AMZN, ANTH, TSPT, LVS calls, DNDN, FB calls, AGU, GTAT, LULU calls, MOS, IPI, EBAY, DSS, VXX, AAPL calls.
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