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Morning Dew: Google, Apple, Deutsche Bank, and Housing

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Watch the banks for clues in today's fuse.

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Editor's Note: The following was posted in real time on our premium Buzz & Banter (click for a free trial).

MINYANVILLE ORIGINAL

As I will be off-site today at a "shoot," I wanted to chime in this morning with a few top-of-mind thoughts. I will check in as I'm able today, and plan to be shackled to my turret hereafter for the rest of the week.

In no particular order:

If you were still at the beach yesterday, we touched on our stair-step trading approach and the notion of eurobonds; it's worth a quick glance.

The basing zone (in the context of a rounding bottom) is still in play for the HGX, which includes housing stocks such as M/I Homes (MHO), Owens Corning (OC), MDC Holdings (MDC), Lennox International (LII), Lennar (LEN), Ryland Group (RYL), and Vulcan Materials (VMC). Please see the chart:


Click to enlarge

I still haven't touched my "lottery ticket" out-of-the-money puts in Google (GOOG). While this is less than a 2% position (with a stop above $605), the Google of old -- a healthy Google -- would have been up double-digits yesterday. A breach of $590 "works" to $522 given the (bearish) head & shoulder pattern if and when it is under $590


Alternatively, Apple (AAPL) is tracing out the mirror image; a reverse head & shoulders; through a pure technical lens, if this stock breaks $577 to the upside, it "works" to $623 in a hurry. And yes, I've thought about slapping on the long Apple-short Google pairs trade (dollar neutral) as it makes intuitive sense.

Note the "gap fillage" that exists from yesterday's opening print. IF we breach S&P 1325, it "works" to S&P 1317 in a technical vacuum. I'll tell ya, if I ever find this vacuum -- or that table I left all that money on -- I would be a very wealthy man.

So it's said and for what it's worth, I do believe the market trades to S&P 1200-1250, but I don't believe it will be in a straight line. Hence, I'm trading more situations with less directional bets, particularly as I'll be out-of-pocket for the better part of today's session.

Watch the banks -- particularly the overseas proxies, such as Deutsche Bank (DB), Barclays (BCS), and Banco Santander (STD) -- for clues in today's fuse. And don't trade stubborn; the definition of an investment should never be a trade gone awry.

That's about it from where I sit at 8:30 in the morning; good luck today, and may the Schwartz be with you!


R.P.

Twitter: @todd_harrison

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