Futures were flat this morning until worse than expected GDP growth numbers sent them lower this morning. Today we hear the Fed’s rate decision at 2:15 ET as the street isn’t expecting much new from them.
At this point of the rally you start to see frustration on both sides of the market. Bulls that sold too early or have been waiting for a pullback are frustrated that they are not more heavily involved. Bears who have tried to short on weakness continue to get rolled up.
Use pivots and moving averages to navigate. The 8- and 21-day moving averages are working very well as a roadmap. For all of 2013 we have not traded or closed below the 8-day, and if we do it will be our first “slight” complexion change. At that point I would likely look to cut the number of my long positions in half and get more tactical.
SPY support is $150.33 then $150, with the 8-day MA at $149.39.
You could also use the pivot high as a reference for some type of push-through failure. If we stretch through $150.85 and do one last squeeze and close below that level, which could be a harbinger of a small pull back. We haven’t seen that yet, though. Sometimes trends stretch into Fed Day and then reverse, so stay on alert for that.
Last night my technical work on the S&P was featured in Jim Cramer’s “Mad Money” in the Off the Charts segment of the show. I go over many time frames and patterns in the market. He highlights my call from last February when S&P was 1350, saying we can see S&P 1700 by 2015.
The timing of this call is a little bit tricky. By no means do I want to “cheerlead” this market up here. I just want market participants to have a plan and stay the course. If you didn’t perform in January, there are 11 months left in the year. Take a peek at the video below, he is always very animated.
Last night Amazon (NASDAQ:AMZN) missed on EPS and saw growth slow, but the stock is still up more than 8% near all-time highs. The important aspect that analysts were looking at in the report was margins, which continue to improve and are the key to the company’s future.
Apple (NASDAQ;AAPL) has shown its first signs of life since earnings over the past two days. Any strength from AAPL would be a major boost to the market, which has to this point done a good job of absorbing and shrugging off AAPL’s steep sell-off.
*DISCLOSURES: Scott Redler is long GOOG, WFC, DELL, BAC, AAPL, TBT, WMT, OCN, GE, DBC. Long LNKD 125 calls, short LNKD 135 calls. Short SPY.