The market spun its tires in the afternoon yesterday following the Fed minutes, but futures took off after hours following a very dovish Q&A session from Chairman Ben Bernanke at the NBER conference in Boston. Those gains held through this morning, and the market had no intention of giving them back during the session. The S&P and Dow made new all-time closing highs, finishing up 1.36% and 1.11%, respectively, while the Nasdaq gained 1.63%.
Suffice to say, the market has seen an impressive comeback from the June 24 low of 1560. When the bounce began, people chalked it up to end of quarter window dressing. When it continued with a series of gaps, people said the rally had no validity without intraday momentum. But now here we are. Price action will always be king.
The first technical hurdle for the S&P was reclaiming the 50-day moving average, which it did on July 5. Now the index, after rallying 7% in just over two weeks, is just a stone's throw away from the 2013 intraday high of 1687. At these levels with the oscillator overbought and stocks stretched from their short-term moving averages, it's hard to initiate new buys. However, that doesn't mean the market is a short.
S&P
Source: eSignal
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High Beta Tech
Amazon (AMZN) continues its breakout to new all-time highs as it gained more than 4% just this week and tagged the $300 mark today. The move this week for Amazon has been very impressive but at this stage the move is getting long in the tooth, making it hard to initiate new positions here.
Amazon (AMZN)
Source: eSignal
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Google (GOOG) pushed up to new all-time highs in today's session, finishing up 1.57%. This stock has seen a solid move out of the upper level wedge from our most recent buy price of $891 to $892. Use today's high of $920.81 as your new point of reference.
Google (GOOG)
Source: eSignal
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LinkedIn (LNKD) closed the day up 4.34% as it broke out of the recent range above $193. Richard Annunziata was on top of this trade idea in the T3Live.com Active Trading Room. Today could be considered Day 1 of perhaps a new leg higher. The next potential resistance level that comes into play is the all-time high of $202.91.
LinkedIn (LNKD)
Source: eSignal
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Netflix (NFLX) has been on the move this week as it broke out of the upper level wedge pattern. This stock rested in today's session as it absorbed the recent gains. Holding above $236 would be constructive going forward.
Netflix (NFLX)
Source: eSignal
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Yesterday Cloud Computing Sector Stocks Showed Some Energy.
Names like Salesforce.com (CRM), F5 Networks (FFIV) and VMware (VMW) woke up and then saw continuation in today's session. We saw more stocks that have been lethargic recently perk up today.
Tesoro (TSO) rallied 5.43% as it has found support from its 200-day moving average. This stock has seen a slide off highs in the past month but could be ready to break a downtrend. Look for potential continuation above $53.47 as it could see a move back to the 50-day moving average.
Tesoro (TSO)
Source: eSignal
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The Homebuilders Sector ETF (XHB) finished the day up 3.59% as it saw a large gap and go to the upside today. Today's move could reverse the recent downward pressure that has been building on this sector ETF. Holding above today's low of $30.79 would increase the validity of today's move.
SPDR S&P Homebuilders (XHB)
Source: eSignal
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First Solar (FSLR) perked up in today's session, finishing the day up 4.08%. There is a lower level pattern that could see follow-through above $47.60 but the trade may need more time to develop.
First Solar (FSLR)
Source: eSignal
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At the time of publication the author is long DELL, TSLA, AAPL, BAC, FSLR, short SPY.