The S&P finished in green territory again Wednesday thanks to a lightning-fast late-day rally. The market shrugged at another warning from Standard & Poors that a downgrade of the European Union and European banks was possible, and then took off based on an unconfirmed report that the G20 was preparing a 600 billion Euro IMF lending facility. That report was later denied by the IMF, but the market held on to most of those gains anyway.
Markets shook the tree early but held above key levels despite the S&P warning. I made a post on the T3Live homepage with some of my longs that I was trading vs. the morning low of $124.97 in the SPY. The potential spot to add was on a break above $126.50, but we did fail again around $127-127.30.
Banks, especially Goldman Sachs (GS) led the way, which is a promising sign. Strategies listed on the T3Live Off the Charts newsletter with GS and the Financial Sector ETF (XLF) panned out well. Tech was a mixed bag today, and we are starting to see some divergences from the market, which is a promising thing for traders.
One pocket of tech strength continues to be Google (GOOG) held the $618 area, which was the prior breakout zone. Apple (AAPL) was weak but above key levels.
Today was the "day of the dogs" as well, as some weak oversold stocks got strong bounces. Stocks like Sina (SINA) and Netflix (NFLX) were strong most of the day, and First Solar (FSLR) was strong early on news but faded after the morning. The cash flow trades were nice, but the patterns are broken long-term.
Casino stocks are also building nice patterns. Las Vegas Sands (LVS) looks better above $46-$47, while MGM Resorts (MGM) could be a good January effect stock triggering above $10.50-10.55. The group leader Wynn (WYNN) is an avoid for now.
Oil service sector was the weaker group for now, but I think you can still be in a tier one long.
This remains a headline driven tape with much more to come tomorrow and Friday. I am long more than I have been in a while. The flag is set-up and technically the market is a long, but the last couple times I have tried a similar type trade, I have been burned.
*DISCLOSURES: Scott J. Redler is long SPY OIH XLF LVS MGM SINA NFLX GOOG POT JPM
