To use a football analogy, the Bulls got a new set of downs now after being pinned back deep in its own territory. Pressure on Greece looks more likely to lead to a cancellation of the referendum, and the market's resilience yesterday perhaps hinted that this outcome was likely. While we keep an eye on the headlines in this environment, a pure technician lets the charts do the talking, and yesterday it didn't appear that calamity was actually on the table.
Now its time to get back to the running and short passing game, rather than hoping for hail mary's. Now that most shorts have been squeezed, it will take dip buyers to drive this market higher, and the rally is likely to be a bit slower. The G20 summit starts today and futures have already been all over the map. All eyes will be on the vote of confidence Friday alongside the jobs report here in the U.S. Some stocks still look good as earnings continue to roll in and quality stocks are still rewarding macro investors,. Traders are also seeing nice cash flow opportunities in sectors coming off the lows.
S&P resistance stands at yesterday’s high of 1242-1244. If the Bulls can close this market above 1250-1255 it would put them back in better scoring position. The next level is around 1274.
Support starts at 1226-1228, then the 1215-1219 area. If the market closes below this area I would consider that a bulls fumble (and we will be watching the same old Jets). Major support is the 1190 zone, which coincides with the 50day and the area that was very important a few weeks back.
Some stocks in the oil sector are starting to act better. They lagged a few months back, but charts are getting more constructive. Examples are EOG, APA, SLB and CLF, which all seem like they can be held for those looking to hold stocks.
The Optical group has a little life in the form of Finisar (FNSR) and JDS Uniphase (JDSU). JDSU had a nice earnings report and seems like it can keep going. A tier one macro position makes sense, above $12.75 can give this more momentum. I can see this $14-$16 at some point by year end. With FNSR I do see a bit of a reverse Head and Shoulders bottom here. A close above $21.50-$22 can get this stock going. It has room to $26-$28 this year.
Mastercard (MA) and Visa (V) are both acting very well as they have been macro hold recommendations a few times this year. No set up here, but they are in the game for higher prices certainly.
Las Vegas Sands (LVS) still looks great. It has a very long-term channel that at one time will resolve for a move to highs of the year. Tier one long makes sense, and a close above $49.50-$50.50 could ignite that move.
There are some more set-ups to discuss, which we do every night in our Off the Charts newsletter. Also, you can follow me and other T3Live contributors live during the trading day in the T3Live Virtual Trading Floor.
*DISCLOSURES: Scott Redler is long SPY and LVS
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