Trading Notes for Today – April 26th

Last day of the trading week and investors will be looking for a strong finish to the upside or some profit taking on the move off the 1538 low. Either way, the jury is still out on direction and there are too many question that need answers going forward. Q1 GDP report this morning may offer some help, but not likely the catalyst the market will need.

The late day selling on Thursday puts a focus on the downside risk today and I will be watching to see how we open on the day. The future are flat to slightly negative, but the GDP data isn’t out yet.

After hours Amazon reported earnings that essentially beat Wall Street estimates. The stock was trading higher initially, but shifted to lower, traders can’t decide on the news. Mixed report when you dig into the data further, but watch to see who it impact retail and the market overall

Starbucks raises guidance for 2013, but is trading lower after hours. Not the reaction you would expect from the positive report. That will be point of interest as the day unfolds tomorrow. JCP gets money from Soros for 7.9% stake in company. The stock is up 7.2% after-hours on the news. This a vote of confidence for the company and the new/old CEO. Again stories worth following for the opportunity on both to see how they impact the retail sector. XRT moved to a new high on Thursday?

Below are my notes relative to the trading day and what I see of interest for today.

Sector Moves of Note:

  1. I am looking for the test of the previous high to lead to a decision for investor, sell and retest the previous lows, or break higher and continue the uptrend. SH & PSQ both remain on the watch list for entry on a reversal to the downside short term.
  2. Semiconductors have been leading technology higher. We missed the trade on the move with no test and follow through for entry. Regardless the sector broke higher (SMH) on the completion of the reverse head-and-shoulder pattern and follow through. If you own it, let it run and raise your stop. KLAC missed earnings and could have some impact on the sector?
  3. Crude oil could make a run at the next resistance for at $94.65. That could be the extent of the short term move in oil for now and we take some profit off the table.  UCO stop raised to $27.80.
  4. Gold in process of filling the gap left behind from the selling. We added the play and we will continue to manage the upside to a target of $143.50 short term.
  5. VIX index remained at 13.5 as the market were flat and no anxiety to drive the direction. Still watching VXX as the volatility did move up slightly on the late day selling. Watching for follows through today?
  6. EWY РSouth Korea made a move higher on Thursday off the low. The downside has been issues with the North, but investors are starting to believe the challenges are noise more than reality. Thus, the trade setup is following through for trade back to $59.60 or even $62.50 the March high. Entry would be the test of the $57 mark on Thursday.
  7. FXI – China gapped open on Thursday past the entry point. Watch for test of the move and the entry for the trade today.
  8. EWS – Singapore broke higher from a five month consolidation range. The bump in China the last couple of days provided the catalyst. Watch for a confirmation of the move and possible trade higher.
  9. FDN – Internet move to the top of the range and ready to break higher? Watching this, but the trade is a challenge with resistance only 50 cents overhead? Scanning the holdings in the ETF are interesting. OverStock and some smaller stocks are driving. The wildcard today will be Amazon, which itself is in a trading range. No post but, interesting trade.
  10. EEM – the emerging markets have been struggling to gain any traction. The downtrend line is in play to be broken on the upside, the bottoming pattern could breakout at $42.75 and the target at 44.25 is worth the trade risk on the move with a stop at $42.35 on a reversal. Watch to see how it trades today.

Economic Data:

Today is the Q1 GDP. The estimates are 3.2-3.5% growth. It will be interesting for all to read.