T3’s Take 3: (Un)Lucky 13


1) (Un)Lucky 13

Most would say thirteen is an unlucky number. Maybe this time around it will prove to be lucky.

The S&P 500 was sideways for the thirteenth (13) straight session closing, down .11%. Most of the weight was caused by weakness in energy as the Energy Select Sector (XLE) was down just over 3%.

Weakness in oil was the major reason for energy names being down. Read the Oil Update below, by Jeff Cooper for additional thoughts.

We continued to see the Nasdaq outperform as it was able to ride the strength of theNasdaq Biotech. Index (IBB), which closed up 1.29%, to a .47% gain.

Apple (AAPL) and Netflix (NFLX) were also up big today, gaining 1.80% and 3.56% respectively.

20 Year Treasury Bonds (TLT) were also down sharply, losing 1.49%

2) Oil Update

Today, our friend Jeff Cooper is back to weigh in on oil:

Oil bounced off its 200 day m.a. on Friday and judging by the outsized moves on many names in the sector such as CLR (flagged in this morning's report as vulnerable) and CXO which left large range outside up days (to mention a few),  it looks like many players suspected oil was going to make a V Bottom at its 200 day.

However oil is right back down today despite a retreat in the dollar and it looks like our 38/39 square-out level is magnetizing oil lower—assuming this is part of a constructive pullback if that level holds.

Today's downdraft in many energy names following Friday's sharp turnup puts the possibility of a Hook, Line & Sinker bearish pattern short term on the table.

So we could see some fast, climactic action in coming sessions in the group especially if oil snaps 40 which was a key level on the way down early this year.

3) Who Says to Sell In May?

The one and only Scott Redler lends his insight into how to navigate this market:

Those who said, “sell in May and go away” didn’t do so well.

Now a lot of people are saying to sell in August. Before we just go off following the crowd, let’s go step by step.

  • The 8 day moving average is $216.54- if you are micro trader, you get out with a close below that.
  • If you are more of a swing trader, use $215.30.Otherwise, stay the course.

    We have pivot resistance at $217.54. A trade and close above that, look for continuation towards $220, or a big Red Dog Reversal (RDR) with that pivot to give a clue.

    We’ll also want to see oil hold last week’s low.