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Stocks Edge Back Up: Short Covering or Sustainable Rebound?

By  +Follow June 27, 2013 1:23PM
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SqueezeThe market opened up the week with a sharp move lower, but has been gradually working its way back up. Is this mini-rally a sign of strength or a trap for bulls? Equities.com asked Toni Turner of TrendStar Trading Group her thoughts in this week's interview, and where she thinks the opportunities are in this market.

EQ: The market got a scare earlier this week sparked by significant concerns coming out of China. Despite some intraday volatility, the major indexes seem to be edging up again. What are your thoughts on the movement so far?

Turner: We have two primary concerns. We have China's potential credit bubble, and we have a sudden rise in interest rates in the U.S. that can potentially give a belly punch to our economy just as it is showing signs of getting on its feet. To me, the move down is understandable, but now we will see if Monday was the so called "bottom" of this move lower on the S&P 500, and if the rebound we are enjoying now is sustainable.

We also had some good news this week with the Case-Shiller index and durable goods orders, as well as other economic reports. Of course, some of the recent bounce in the past few days has been due to a short squeeze. So I don't assume this short term rally is necessarily a signal that everything is OK now. I'll need at least a few more days to see if this is simply short covering or if investors are really getting back into the market.

We have to remember two things: the market typically moves higher heading into a holiday—July 4 is next Thursday—and we are closing out the second quarter, which means there's window dressing right now as we close it out. So next week being a holiday week is going to be shortened and it may be a bit flat, with many institutional traders and investors on vacation. But I believe the week of July 8, we're going to get a reality check.

EQ: Longer-term investors may not like the short-term volatility that we're starting to experience in the market, but for active day traders, does this mean more opportunities to take advantage of?

Turner: Absolutely. Short-term traders like volume and volatility. That's our mantra. We can't make money in a flat market. To that point, the last move down and then the quick rebound off of the low gave nimble traders quite a bit to work with.

EQ: Regional bank stocks have been getting more attention, as you tweeted recently. Is this because they stand to benefit if and when the Fed begins to taper the stimulus program?

Turner: That's part of it. Naturally, if interest rates move higher, banks as a whole, will benefit as they can charge customers higher interest rates on loans. Additionally, the Case-Shiller 20 City index came in this week 12.1 percent improved in home prices over the same period last year. Regional banks typically benefit from improving home prices. Plus, we have an infusion of foreign buyers coming into the U.S., mainly from Asia, who are buying up properties, and I know for a fact that certainly not all of them are paying cash. Many of them are financing these purchases. That stands to benefit regional banks.

Also, if you noticed, regional banks did not fall off a cliff when the market moved lower. If you look at the SPDR S&P Regional Banking ETF (KRE), when the market moved lower, the KRE remained above its 50-day moving average, and many of the banks in that space have moved higher over the last few days.

EQ: What are some other stock sectors and industry groups that look appealing to you? Which ones do you want to avoid?

Turner: I do like the regional banks and the KRE on a pullback to between $33 and $33.25. It jumped up over the last couple of days.

If bond prices actually find a low here, and start to rise in the next few days, I might tiptoe into the iShares Dow Jones US Real Estate (IYR). Mostly though, except for quick trades, I'm standing on the sidelines and I'm waiting for the market to decide what it's going to do next.

Results for KRE
Stock_Tracker
20 Apr 14 06:49:10
SPDR S&P Regional Banking ETF (KRE) 39.85 $KRE Look for Shares of SPDR KBW Regional Banking ETF to Potentially http://t.co/2U1Sc94Kgt
Insider Trade Alerts
20 Apr 14 06:27:59
$KRE Canadian "Stock Market Super http://t.co/A3ATQmD6lG
Monet Tana
19 Apr 14 20:14:07
$KRE Canadian "Stock Market Super http://t.co/RaYX5eQ1Zw
OTPicks.com
18 Apr 14 14:24:15
http://t.co/QzFp1WC0ss DennyT: GMCR Insider Transactions $GMCR $KRE $DUST $EWZ $M: DennyT http://t.co/vJli0tczqV http://t.co/QzFp1WC0ss
O T P i c k s . com
18 Apr 14 14:24:13
http://t.co/awZxDQ0zpX DennyT: GMCR Insider Transactions $GMCR $KRE $DUST $EWZ $M: DennyT http://t.co/gwbZnS9mzm http://t.co/awZxDQ0zpX
OTPicks.com
18 Apr 14 14:24:10
http://t.co/QkCFZ8q0T8 DennyT: GMCR Insider Transactions $GMCR $KRE $DUST $EWZ $M: DennyT http://t.co/dvlaGvCZjL http://t.co/QkCFZ8q0T8
Josue Dollar
18 Apr 14 10:47:36
$KRE Canadian "Stock Market S http://t.co/0mh9ropaKB
iHangout
18 Apr 14 10:12:11
DennyT: ALERTS, HOT STOCKS & CHARTS: GMCR Insider Transactions $GMCR $KRE $DUST $EWZ $M http://t.co/RxX9GdtonQ
iHangout
18 Apr 14 09:52:38
DennyT: Xtremepicks Alerts: ALXN Insider Disclosure $ALXN $KRE $MINE $PCLN $JN http://t.co/RVtAHBRofB
danrocks
18 Apr 14 09:46:21
$CLF alot of talk going around about this one $ALXN $ACLP $KRE $WNTR $XOM http://t.co/WXidbybSC6
DennyT
18 Apr 14 09:15:51
ALXN Insider Disclosure $ALXN $KRE $MINE $PCLN $JNPR Opinion Today,Volume,Volume,Recent Headlines,Getting Inte http://t.co/HWhDzVOVrk
chartguy89
18 Apr 14 08:37:35
KRE Stock Chart $KRE $XLF $AUY $ACI http://t.co/0OaLVPfUnE http://t.co/9hsdKlVEB7
leahanne
18 Apr 14 07:53:34
$MCD McDonald's Corp (MCD) 100.25 -0.58 (-0.58%) $ILF $MYEC $KRE http://t.co/XVNsPbsDX2
Stock_Tracker
18 Apr 14 07:39:47
$KRE Recent Headlines Conditions are shaky for stock investors 8:11 p.m. March 27, 2014 - Dave Fry Bulls see d http://t.co/DqoLqL87tB
iHangout
18 Apr 14 04:42:46
chartguy89: Stock Charts: KRE 1.76 Stock Charts $KRE K.R. Energy S.p.A. MCI http://t.co/Y0HkkldQ54
chartguy89
18 Apr 14 04:38:53
KRE 1.76 Stock Charts $KRE K.R. Energy S.p.A. (MCI) KRE Stock Chart - 1 Month http://t.co/opaWdEV09n http://t.co/LYPhPpjuuG
Dmitri Magnuson
18 Apr 14 03:24:25
$KRE Canadian "Stock Market Super http://t.co/17yg8rUTMB
ShortStockVolume.com
17 Apr 14 14:31:15
Top Shorted Stocks 04/17/14 1. $BEE 88.38% 2. $XLF 87.55% 3. $XLI 86.08% 4. $AMTD 85.24% 5. $KRE 84.31% 6. $DHI 82.68% 7. $BCEI 81.01%...
ShortStockVolume.com
17 Apr 14 14:31:13
Top Shorted Stocks 04/17/14... 4. $AMTD 85.24% 5. $KRE 84.31% 6. $DHI 82.68%... http://t.co/kYRkrUJHTo
Damien S. Faucher
17 Apr 14 09:40:04
$KRE Sharp move seen in regional banks http://t.co/YEZrRH0aSU
leahanne
17 Apr 14 09:38:22
$T AT&T Inc (T) 36.05 -0.05 (-0.14%) $KRE $SPLI $ARIA http://t.co/lSpZqoVGrT
Damien S. Faucher
17 Apr 14 09:34:35
$KRE Canadian "Stock Market Superstar" Sees Bull Market Continuing: A Wall Street Transcript Interview with Randall Abramson, CFA, CEO...
Johnny
17 Apr 14 09:25:33
Regional banks underperforming after reporting weak results $FITB $BBT $PBCT $KRE
lookn4wins
17 Apr 14 09:16:14
$KRE Stock Chart $KRE Most recent stock chart and technical analysis. $YELP $ACT $MCD $XLU $PVA $JNPR http://s http://t.co/eEpyWMu1rh
lookn4wins
17 Apr 14 09:02:41
$XLU Candlesticks $XLU Most recent stock chart and technical analysis. $ACLP $SMH $KRE $INO $PGJ $SCTY http:// http://t.co/9ulEk8xLkX
chartguy89
17 Apr 14 08:39:38
XLE Stock Chart $XLE $RAD $LVGI $KRE http://t.co/EPJyqD7RU5 http://t.co/vEEJamBXTW
danrocks
17 Apr 14 08:09:59
$BAC alot of talk going around about this one $XLK $KRE $MDNT $INTC $AUY http://t.co/oEQDie3egP
lookn4wins
17 Apr 14 08:02:46
$LIVE 200 Simple Moving Average $LIVE Most recent stock chart and technical analysis. $GDX $KRE $NOK $GDX $ANV http://t.co/J6f28qkrh4
Lightspeed Financial
17 Apr 14 07:29:43
Call/Put Highest % volume changes: Calls: $TSM, $CAR, $VWO, $RSH, $ONNN. Puts: $KRE, $CTL, $IDIX, $EWH, $M.
Emylers
17 Apr 14 07:23:22
$KRE Up to date company activities and other important information about $KRE $KRE DD Notes ~ http://www.ddnot http://t.co/ni0WFvzO17
BlockTradeAlert
17 Apr 14 07:04:03
BLOCK TRADE: $KRE 800,000 shares @ $39.50 [10:04:03]
lookn4wins
17 Apr 14 06:48:23
$TAN 200 Simple Moving Average $TAN Most recent stock chart and technical analysis. $JNPR $IWM $KRE $AA $RIGH http://t.co/0kFnBxd0TD
Jaycob Keating
17 Apr 14 05:38:51
$KRE Where Some of That Momentum ETF Cas http://t.co/GksP5QCOUZ
Stock Market News
17 Apr 14 02:18:50
$KRE Where Some of That Momentum ETF Cas http://t.co/cQp7ubsajU
Maxton Gelson
16 Apr 14 17:14:09
$KRE Where Some of That Momentum ETF http://t.co/vlxbDcUioY
Milford Schwarz
16 Apr 14 16:25:10
$KRE Where Some of That Momentum ETF http://t.co/ItfVDD2Yeq
Crew Gretzky
16 Apr 14 10:56:44
$KRE Where Some of That Momentum ETF Cas http://t.co/YHUcbzIWaU
Market Int Center
16 Apr 14 08:37:36
Potential S&P Regional Banking ETF SPDR $KRE Trade Targets 4.25% Return ( http://t.co/exFZ6aedUw )
Stock Forums
16 Apr 14 01:16:52
Share your opinions about $UUP with 12,000+ active traders today! Click Here: http://t.co/MqwxTDV0yP Trending $JO $REVO $MNDO $KRE
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16 Apr 14 00:54:37
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AR. H. Qadri
15 Apr 14 23:23:08
RT @SeekingAlpha: Yellen Talks About New Higher Capital Requirements For Banks http://t.co/bbetqFAvH3 $KBE $KRE
Seeking Alpha
15 Apr 14 22:59:28
Yellen Talks About New Higher Capital Requirements For Banks http://t.co/bbetqFAvH3 $KBE $KRE
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Share your opinions about $MO with 12,000+ active traders today! Click Here: http://t.co/1UfZ75L0TH Trending $JBII $KRE $MU $T
Kym L
15 Apr 14 19:55:26
Still think $KRE has a date with the 200dma
Kym L
15 Apr 14 19:54:32
$KRE doesn't look great, either.
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(⺣◡⺣)*。✧
15 Apr 14 18:46:50
$kre$$ed
				
				
By  +Follow June 27, 2013 1:23PM
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