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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.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


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Results for KRE
selling_theta
26 May 15 12:48:50
$BKX and $KRE well off lows. Again, I think this matters more to the MKT than the transports getting trashed.
PolgarStocks
26 May 15 10:49:42
XLV Consumer Discretionary Select Sector SPDR % Change http://t.co/WS6YkJ1o5S $XLV $AMDA $KRE $GS #XLV #pennystocks #invest
Stock_Tracker
26 May 15 10:47:12
USO PowerShares DB US Dollar Index Bullish Fund Ex-Div Date http://t.co/lOOQIBF92X $USO $KRE $XLU $CLF #USO #investing #tradeideas
Rosner Stocks
26 May 15 10:39:36
IBB International Business Machines Volume http://t.co/awgiK3JQo0 $IBB $KRE $MFC.TO $HSD.TO #IBB #invest #stock
BNK Invest
26 May 15 09:44:02
Reminder - National Bank Holdings $NBHC Goes Ex-Dividend Soon $KRE #dividends http://t.co/5o1L0hNY5P
Jordan Thurow
26 May 15 09:05:30
$KRE in a rising wedge. This could be a good short position. http://t.co/rramVKu1ak
Rosner Stocks
26 May 15 08:41:15
KRE SPDR KBW Regional Banking Index ETF Volume http://t.co/pIvAr3OyFo $KRE $BIIB $XIV $ADMD #KRE #pennystocks #stock
IH News Desk
26 May 15 08:39:37
IPCI Intellipharmaceutics International Inc. Stock Message Board http://t.co/UE7j4Olv0Y $IPCI $KRE $SGY.TO $GILD #IPCI #stocks #share
nicholas
26 May 15 08:36:20
IHPosts: BIDU Baidu, Inc. Prev Close http://t.co/f3OPLhxUjZ $BIDU $KRE $SPXS $SWKS #BIDU #stockmarket #finance … http://t.co/Z2kvWG3C1I
leahanne
26 May 15 08:33:34
CELG Celgene Corp. Stock Forum http://t.co/fQSa0sCTrz $CELG $IYR $KRE $BABA #CELG #stockmarket #stock
Stock Forums
26 May 15 08:33:34
COP ConocoPhillips Financials http://t.co/Moi8PSZ1cB $COP $SLV $KRE $UNG #COP #stocks #share
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26 May 15 08:33:11
BIDU Baidu, Inc. Prev Close http://t.co/xYdzXID5lp $BIDU $KRE $SPXS $SWKS #BIDU #stockmarket #finance
jim50
26 May 15 08:32:09
BBY Best Buy Co, Inc. Change http://t.co/HuyvLiNFO5 $BBY $KRE $SBUX $KGC #BBY #stocks #tradeideas
My3Sons
26 May 15 08:04:26
$KRE. For the past 3 months, THIS IS YOUR MARKET! Grind, break higher, #FAIL.
J.C. Parets
26 May 15 08:02:37
everyone who thought that was a breakout in regional banks was wrong..... $KRE
Stock Market Picks
26 May 15 06:41:57
$FAZ $KRE $OIH $PFF $GDX $GLD $FXI $QQQ $UCO up to 1300% since 2010, easy to follow, only 6 open positions at a time. http://t.co/Vjj8yzTD9F
Stock_Tracker
25 May 15 20:47:15
USO United States Oil Fund, LP 52Wk Low http://t.co/yXrLWpzFJj $USO $KRE $DNT.TO $SEMG #USO #finance #stocks
PolgarStocks
25 May 15 20:47:07
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Penny Stocks Blog
25 May 15 20:46:08
RT @stock_forums: KRE SPDR KBW Regional Banking Index ETF P/E Ratio http://t.co/Oro6U88KI3 $KRE $BP $CAT $ACE #KRE #stockmarket #pennystoc…
Stock Forums
25 May 15 20:40:10
KRE SPDR KBW Regional Banking Index ETF P/E Ratio http://t.co/Oro6U88KI3 $KRE $BP $CAT $ACE #KRE #stockmarket #pennystocks
Stock Market Picks
25 May 15 18:33:01
$FAZ $KRE $OIH $PFF $GDX $GLD $FXI $QQQ $UCO up to 1300% since 2010, easy to follow, only 6 open positions at a time. http://t.co/Vjj8yzTD9F
Stock Market Picks
25 May 15 05:54:01
$FAZ $KRE $OIH $PFF $GDX $GLD $FXI $QQQ $UCO up to 1300% since 2010, easy to follow, only 6 open positions at a time. http://t.co/Vjj8yzTD9F
Stock Market Picks
24 May 15 17:29:20
$FAZ $KRE $OIH $PFF $GDX $GLD $FXI $QQQ $UCO up to 1300% since 2010, easy to follow, only 6 open positions at a time. http://t.co/Vjj8yzTD9F
Bad * Charts
24 May 15 04:52:35
Banks breakout! Check prev. post and updated chart. http://t.co/h6ApyVHusA $KRE http://t.co/mKyz9kh9gc
Stock Market Picks
23 May 15 15:45:11
$FAZ $KRE $OIH $PFF $GDX $GLD $FXI $QQQ $UCO up to 1300% since 2010, easy to follow, only 6 open positions at a time. http://t.co/Vjj8yzTD9F
nasdaqfan
23 May 15 00:51:11
X USX-US Steel Group, Inc. Current Price http://t.co/K8dWAEkby0 $X $PXD $CE $KRE #X #pennystocks #tradeideas
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23 May 15 00:48:36
UPRO ProShares UltraPro S&P 500 Message Board Posts http://t.co/xZo8SRupex $UPRO $KRE $AVH $ORCL #UPRO #stock #share
Rosner Stocks
23 May 15 00:48:05
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23 May 15 00:47:11
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Penny Stocks Blog
23 May 15 00:46:39
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23 May 15 00:44:30
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Investors Hangout
23 May 15 00:44:25
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23 May 15 00:44:25
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23 May 15 00:44:17
KRED KonaRed Corp. Ask Size http://t.co/FMlPm3vnpB $KRED $KRE $ACT $RSX #KRED #stockmarket #share
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23 May 15 00:44:16
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23 May 15 00:44:15
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PolgarStocks
23 May 15 00:44:14
KORS Michael Kors Holdings Ltd. Stock Message Board http://t.co/qLDRf58FHx $KORS $KRE $CAR $EFA #KORS #stocks #tradeideas
lookn4wins
23 May 15 00:42:45
ISR IsoRay Inc. Financials http://t.co/bfv3rRgZz4 $ISR $KRE $SLV $RD.V #ISR #share #nasdaq
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23 May 15 00:41:17
GOOG Google Inc. - Class C News http://t.co/Zk9eO5ZV0Y $GOOG $BRN $KRE $CYPW #GOOG #stockmarket #finance
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23 May 15 00:41:16
GOOG Google Inc. - Class C News http://t.co/3KVsXTgtkQ $GOOG $BRN $KRE $CYPW #GOOG #stockmarket #finance
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FXY Currency Shares Japanese Yen Trust Dividend http://t.co/8XwYLIk7bc $FXY $KRE $BX $AAPL #FXY #investing #stocks
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FRO Frontline Ltd. Stock Forum http://t.co/4LW2ZtF7V4 $FRO $KRE $AMZN $XLB #FRO #stocks #stock
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FB Facebook, Inc. Market Cap http://t.co/D6l8viAcWK $FB $DOW $FXY $KRE #FB #finance #share
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FI Frank's International NV Short Sales http://t.co/RG4mUVAaxC $FI $CTIX $KRE $CAR #FI #stocks #pennystocks
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23 May 15 00:38:23
CVX Chevron Corp. Tick http://t.co/tqYzWYxvs6 $CVX $KRE $ISR $JBLU #CVX #stockmarket #share
James DiPlata
23 May 15 00:36:37
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23 May 15 00:34:05
BGFV Big 5 Sporting Goods Corp. Ask Size http://t.co/KPanavDj5o $BGFV $KRE $ALKM $BABA #BGFV #stockmarket #stocks
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23 May 15 00:33:11
AVEO AVEO Pharmaceuticals Inc. Volume http://t.co/UXD0492EL6 $AVEO $KRE $IBB $EBAY #AVEO #pennystocks #investing
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By  +Follow June 27, 2013 1:23PM
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