SPY gapped down this morning as there was no resolution to the debt ceiling over the weekend. The market took this news in stride and rallied most of the day before selling off into the close. The chart still looks constructive as we flag in front of resistance, but the action right now is very headline driven. While most expect a deal to get done at the 11th hour, it is important to stay plugged in. More market leaders have earnings that come out this week as well. Tonight we saw earnings from BIDU (positive) and NFLX (negative). Tomorrow night we will see earnings from AMZN and LVS.
Trade Update: OIH is performing well as it extends from the most recent buy entries. Today was a spot to lighten up on OIH as it ran into resistance 1 from the previous entries that were targeted. There have been strong earnings reports from some of the companies in the OIH, like HAL, SLB and BHI. This can continue higher as it's not far off of 52 week highs, but had a nice 5 day move from the most recent $155 buy entry.
MCP was targeted last in last Wednesday's post as it was wedging on the daily chart. MCP is now holding above the wedge and put in an inside bar today. Look for an additional add-on buy above $61. First resistance is $62.50-$63.
A recent IPO, YNDX, is poised to make a move soon. First entry is a close above $37 with an additional cash flow add through $37.90. $42.01 is the high from the day of its IPO.
Although there was a negative article out of Barron's over the weekend about LNKD, it never broke below the most recent pivot point of $96.20. LNKD is holding higher and looks good over $105 and then the most recent high of $110.50. Watch the price action here, this stock is hard to get a grasp on.
The banking sector has shown signs of life again as they break above downtrend lines and stocks like BAC, GS, and MS have bounced well off of lows. JPM is trading and holding above the descending trendline. Look to buy on a dip because if this move has any validity, it should not trade back below the long term descending trendline. Today, GS showed relative strength versus the market as it was up 1% on the day.
The credit card sector is also performing well. Visa has earnings this Wednesday, July 27th after the close so it could have a run into earnings. Look for a momentum play above 52-week highs of $90.83.
It is becoming harder to find shorts in this market as it is slightly off 52-week highs, however, this is still a market of haves and have nots. RVBD posted earnings last week and closed on the lows of the days. It is now bear flagging on the daily and has had time to absorb some of the most recent down move. Look for a break of the bear flag at $30.90.
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