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Minyanville's T3 Morning Market Call: Market Holding Higher Despite Low Volume


Some high beta leaders are still intact with various tech names, including Apple and Google.

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Futures are quiet this morning as markets are doing a great job of digesting recent gains at these higher levels. The bears call it stalling, the bulls call it digesting! I'm in the digesting camp as the S&P is doing nice horizontal work above the outlined 1388-1394 upper high level support. The 8/21 moving averages are playing a little catch-up, which is healthy. A move and close above the 1407 level will have shorts rolling up and making some decisions. Next resistance will be the highs set earlier this year of 1415-1422.

Headlines this weekend suggest that Germany is getting tough with Greece, which is a positive thing in my opinion. Also, the ECB wants indebted nations to follow previously-set austerity guidelines if they are going to get continued support (another good thing in my opinion). Here in the US, Republican Presidential Nominee Mitt Romney chose Paul Ryan as his VP candidate, which I think is a great choice. Although my family knows Rubio well, picking Ryan shows that Romney is serious about getting our spending in order, with a limited government and "free enterprise" approach. I will stop it here on the political front.

September, in my opinion, will be billed as a Rubber Match Month. The Troika is now sitting in Greece's kitchen and Germany has its important vote, in addition to the Fed and ECB meeting again. On top of this, most of Wall Street comes back from vacation after Labor Day, hopefully bringing some volume with them. The key will be for market participants to know what type of vehicle they're driving. Know what it will take to switch gears if complexion changes. Know what it will take in order to stay with the trend, which has been to the upside. Hedges make sense as we climb, or if the trend changes. I don't drive a Mack truck, so I will not need to build positions or ease in and out. I can use a tier system as I navigate more of a triathlon bike or sports car.

If you manage big money and have a ton of long exposure, buying insurance before a potential storm is always cheaper. Although you might not need the insurance, it will give you peace of mind to hold quality longs as some continue to make new highs and hang tough. There are also lower level sectors that continue to see commitment from lower levels.

During the course of this year some former leaders started to change character and have fallen from good graces. This happens each year so it's always important to measure the technical landscape to use high level stops as exits instead of selling after big down moves. Overall, though, some high beta leaders are still intact with various tech names.

Apple (AAPL) stock has given three entries since the earnings discount. It's now digesting well above the recent $615-617 pivot. The next buy price for momentum is an area that that stands around $623.50-625.50. Highs of the year are not in for this stock in my opinion.

Google (GOOG) is acting much better since earnings. The $617-$620 level was the last calculated buy and now a close above $645-648 sets it in motion for highs of the year. I still feel we can see $700 this year, if not early next year.

Amazon (AMZN) is acting choppy, perhaps because of the high valuation, but technically it stays intact as long as it holds above $228-$230.

Baidu (BIDU) went from the doghouse back into the penthouse after this quarter's earnings. We isolated a few areas to get back involved with it; one was $118, then $125, and now it's flagging with another pivot at $132. Above this area and its gets in motion again.

Western Digital (WDC): Check out the chart and huge gap from July 26. The gap held and power came into this stock. It still looks good.

Seagate (STX) also moves well to the upside.

International Business Machines (IBM) is holding higher. It's slow but decent as long as it stays over $195-197.

Exxon Mobil (XOM) and Chevron (CVX) still look good and rewarding traders and investors with an equities plan.

Wal-Mart (WMT) and Target (TGT) are also big winners this year. The stocks are highly liquid and have been listed many times in all our products.

Silver (SLV) and gold (GLD) are a bit more interesting, but still no real action. GLD needs to ignite above $158-159 and not look back. SLV needs to get and stay above $27.40-$27.60

In general, do not overtrade during a light volume period in the market. We are in mid August and action like we saw last week can continue. Pick spots a bit more carefully and don't turn good ideas into bad trades.

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Scott Redler is long AAPL. Short SPY.
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