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From: Redler All-Access
Date: Thu, Oct 13, 2016 at 8:31 AM
Subject: A Level Approach - Scott Redler's Morning Note - 10/13/16
Scott Redler All-Access Morning Note
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*A Level Approach*
October 13, 2016
*Videos/Charts (click to view)*
Morning Call: *October 13, 2016*
Companion Charts: *October 13, 2016*
Daily Recap: *October 12, 2016*
By Scott Redler
We have mostly red arrows around the world as technicals break down and the
news cycle grows more negative.
The US election headlines going into overdrive, Russia said all their
operatives should come home, and Iranian rebels in Yemen shot missiles at a
In Europe, Deutsche Bank instituted a hiring freeze.
The *DAX* is -1.1%, the *CAC* is -1.2%, and the *FTSE* is -0.6%.
In Asia, Chinese data shows more slowing. The *Nikkei* is -0.4%. *The Hang
Seng* is off another -1.4% and down 4 days in a row.
So we’re feeling some headwinds from overseas today.
On Tuesday, *SPX* fell hard, undercutting the 2144 level that we’ve
outlined for weeks. Lots of leaders lost momentum, closing below the
8/21/50 moving averages. I sent out a few Tweets about reducing risk as
that's what we do when levels break. Yesterday, we saw a feeble bounce to
2144 that didn't create much interest.
SPX futures are down 12-15 handles. The index is looking to test 2118, the
next outlined spot of importance. With Oscillators probably around -50, I’m
not sure how much pressing will happen, but we shall see. The next real
area under 2118 is 2060-2085. 2100 should get some attention as a round
*SPY* broke $214.50 on Tuesday and retested it yesterday when many traders
were out for the holiday. See if $212ish can hold. This was big support
over the summer. Under this is $210.70, then $208.60 is a big spot to watch.
Tech had a big engulfing down day Tuesday, losing some upper momentum. *QQQ*
lost the 8/21 day in one big candle. Today it's opening below the 50 day.
See if it can reclaim $117, otherwise next support is $115.85.
*AAPL* still acts best as *Samsung* has a lot of problems. It's extended
but holds in well. I'd look to see if it can go green. Holding $116 keeps
upper momentum intact.
*MSFT* couldn't hold $58 and is sloppy. It still needs time. $56 is big
Biotech has lagged for months and has been very weak the last few sessions.
Maybe IBB is worth a look today for a red-to-green trade or a RDR around
the $269.80 pivot. There is big support at $265. It’s below the 8/21/50 and
even the 200 day.
Small caps stopped many traders out on Tuesday as *IWM* lost the 8/21/50
day and got hit hard. Now see how it does at $119.80ish, which is a very
big intermediate support spot.
Oil has had an underlying bid for almost 2 weeks. See if that continues.
*USO* has support at $11.36. Then, $10.90 is a big level to watch.
*XLE* is trying to hold up. It needs to hold $69.20 to keep its recent
relative strength, and staying above $70 helps the tape.
*There has been lots of movement both ways, but many leaders lost momentum
over the past week:*
*AMZN* lost the 8 day for the first time in a while and could test the 21
day at $815ish. Yesterday's low is $830. See how it deals with that pivot.
*GOOGL* tried to break out Tuesday while the market got hit. See if it can
hold $805.50-$808 to stay somewhat constructive.
*NFLX* had a fast move above $100.30 and hit $107 to do a round-trip. There
is a lot of support around $97.50 for a possible red-to-green trade for
cash flow. But I wouldn't expect too much.
*TSLA* remains headline-driven. See if it holds $200.50 and tries to take
out $204.20 to fill the gap from the GS downgrade.
*BABA* started to lose upper momentum a week ago, and again when it broke
$106.50 Tuesday. Yesterday, it got hit hard with a low of $101.82. See if
you can buy for a red-to-green today against that level, but we need to be
more tactical here. The 50 day is at $99.50ish.
*FB *tried to perk up in a weak market. It still looks okay. See if it can
hold $128.23 today. The 50 day is closer to $127.
*TWTR* came down fast as no bids came in. The recent low is $16.93. I
bought some calls down here. There's a gap open for a quick move if it
clears and holds $18.24.
*The action in New Issues changed as ACIA (the leader) announced a
secondary and couldn't hold price:*
*ACIA* lost the 8/21 moving averages below $110 and broke the secondary
pricing at $100. It put in a low yesterday at $88. Look for a potential Red
Dog Reversal around that. Or, see how it reacts at the $83 earnings gap.
*TWLO*: we’re still waiting to see the secondary pricing. It hit a low of
$50.04 for a pivot. There is another pivot at $48.60.
*LN* lost momentum on the big Red Dog Reversal around the $49.73 pivot. Now
it's below the 8/21 day. Now use $45.96 as your pivot. The 50 day is near
$44.50. Perhaps look to buy if it holds above.
*PI* broke $32 as most new issues lost upper momentum. Now see how it
handles the $27.50 pivot.
*EVBG* couldn’t rally even with buy recs after the quiet period. See if it
*TTD* was strong yesterday as it builds a lower-level pivot. See if it
tries to clear $27 for a trade.
*NTNX* has been pulling back each day since the 2-day pop. Use $31.25 as a
pivot for a potential Red Dog Reversal.
*COUP* did a nice Red Dog Reversal around the $27 pivot and had decent
follow-through yesterday. It could be worth a look to go from red-to-green
*Metals and miners are up a little today*:
*GLD* is building a lower pivot after breaking down. See if $119.28 holds.
There could be a trade if it clears $120.10, but there is lots of
resistance at $120.70.
*GDX* is trying to hold a lower pivot at $22.50 after breaking down. See if
it reclaims $23.44 for upside to $24.
*TLT* had a RDR yesterday around $132.51 and is getting some upside
follow-through today. There is room to $134, then the next spot to watch is
*Today’s Trading Focus*
I’m coming in short *SPY*. I covered half pre-morning call around $212.35.
I'll see how the market handles this big area before decided on whether to
cover, add more short, or sit still.
I will watch for relative strength in *GOOGL*, *AAPL*, and *FB* for trades,
and maybe even *NFLX* for a scalp long. I might buy back my short *BABA*
calls to take the position to straight calls from a spread. I will also eye
*ACIA* and TWLO for red-to-green trades.
*Positions Disclosure:* Scott J. Redler is long BABA call spread, TWTR
calls; is short SPY
*Today’s Trading Calendar*
*US Economics (Time Zone: EDT)*
08:30 Import Price Index MoM (Sep): exp. 0.10%, prior -0.20%
08:30 Import Price Index YoY (Sep): exp. -1.00%, prior -2.20%
08:30 Initial Jobless Claims (10/8): exp. 253k, prior 249k
08:30 Continuing Claims (10/1): exp. 2050k, prior 2058k
08:45 Bloomberg Oct. United States Economic Survey
09:00 DOE Short-Term Crude Outlook (Oct): prior 50.58
09:00 DOE Short-Term Mogas Outlook (Oct): prior 2.26
09:00 DOE Short-Term Diesel Outlook (Oct): prior 2.7
09:00 DOE Short-Term Ht Oil Outlook (Oct): prior 2.58
09:00 DOE Short-Term NatGas Outlook (Oct): prior 10.79
09:45 Bloomberg Consumer Comfort (10/9): prior 41.4
10:30 EIA Natural Gas Storage Change (10/7): exp. 83, prior 80
10:30 EIA Working Natural Gas Implied Flow (10/7): exp. 83, prior 80
11:00 DOE U.S. Crude Oil Inventories (10/7): exp. 1750k, prior -2976k
11:00 DOE Cushing OK Crude Inventory (10/7): exp. 400k, prior 569k
11:00 DOE U.S. Gasoline Inventories (10/7): exp. -975k, prior 222k
11:00 DOE U.S. Distillate Inventory (10/7): exp. -1100k, prior -2359k
11:00 DOE U.S. Refinery Utilization (10/7): exp. -1.00%, prior -1.80%
11:00 DOE Crude Oil Implied Demand (10/7): prior 16602
11:00 DOE Gasoline Implied Demand (10/7): prior 10117.3
11:00 DOE Distillate Implied Demand (10/7): prior 5153
12:15 Fed's Harker Speaks on Economic Outlook in Philadelphia
21:00 Fed's Kashkari Speaks at Town Hall in Missoula, Montana
08:30 CAD NHPI m/m
Tentative GBP Gov. Carney Speaks
20:30 AUD RBA Financial Stability Review
21:30 CNY CPI y/y
*Delta Air Lines *(DAL)
*Marriott Vacations Worldwide* (VAC)
*Winnebago Industries* (WGO)
*Wynn Resorts *(WYNN)
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