Lethargic Divergences – Scott Redler’s Morning Note – 11/14/17

We have mixed markets around the world with a quiet/lethargic Feel. Most indices have come a long way over the past few months and are trying to digest higher. But they feel a little vulnerable.

Europe is up small.

In Asia, the Nikkei has pulled back almost 5% from last week’s highs and is flattish this morning.

SPX futures are down 3-4 handles. For about a week or so, we’ve walked into some softer opens which have been absorbed. Breadth hasn’t been great lately, but we’ve held above the 21 day and built a floor to trade against. As long as 2566-2575 holds, we could see a lot of the same type of action. It’s been a very stock and sector specific trade with pockets of movement here and there.

SPY opened lower and then reclaimed $257.30 to close near the highs of the day. We’ll see if we hold above that pivot today, or if volatility rises a bit. Resistance is $258.59, then $259.40

QQQ needs to hold $153ish to keep its leadership role as some other sectors roll over. We’ll see if it can stay elevated. Otherwise, the trade can change a bit. Resistance is $154.07, then $154.35.

Small caps broke the 8/21 day over a week ago. Now IWM is trying to hold the 50 day. It’s been a decent trade off the lows in the past few sessions. Yesterday’s low is $145.50. See if that holds to keep things intact. It needs a strong close above $147.25 to take some pressure off.
Banks have lost some momentum in the last two weeks. Now the XLF is trying to hold $25.90. That is key support for active traders. Resistance is $26.30.

JPM hit a low of $96.60 and went green yesterday. See if that pivot holds. I wouldn’t add on strength.

BAC is still struggling but it gave us $26.14 to trade against. We’ll see if that holds. Above $26.48 and perhaps it gets a push.

GS isn’t special. See if $237-$238 continues to hold.

Oil and energy names hit a peak last week and they’re trying to prove there could be more upside.

XLE needs to hold the $69 area to keep some active interest.

OIH needs to hold $25.26 to keep the “right shoulder” intact to stay actively interesting.

Bios were the first group to lose the 8/21 and IBB broke the $335 momentum level. Now IBB is trying to hold the 200 day with a recent low at $308. It’s not looking very special but keep an eye on it.

The Go To List is getting a little looser and wider and feeling different. Some names are still hanging in there, but we need to be more specific and careful. There’s a little more of a “two-way trade” now:

AMZN had nice pre and post-earnings moves. Some are long vs $1050. More active traders got an extra trade when it held $1117 and cleared $1135 to hit $1139.90. Then it pulled back pretty hard. Use $1122 as an upper support pivot if you are super active. It’s up $3 this morning.

GOOGL gave a nice pre and post-earnings move. Some are long vs. $1022. It’s been a bit lethargic lately. I would watch $1035 as key upper support if you trade for cash flow.

NFLX broke $198 but had a Red Dog Reversal Friday around the $190.81 pivot to hold the 50 day. It cleared $192.59 to hit a high of $196.05. It’s building an upper channel. I’m not sure there’s much to do here today.

FB is a bit lethargic but it’s flagging above the 21 day at $177. See if it holds. I’d use that as a stop. If the market gets better, there could be a trade if it gets above and stays above $179.10. But it’s been hard to buy strength lately.

AAPL has been kind of lethargic lately but it’s come a long way. Some are long vs. $171. Super active traders might use $173 to adjust around. A close above $174.50 would have it looking better.

TSLA finally got above and stayed above $308.60 to hit a high of $316.80. It seems like if it can hold $310-$312, it can continue to the $320-$324 area to complete a gap fill trade into resistance. The semi truck event is Thursday.

NVDA responded well to earnings but gave a bunch of it back. See if $211.63 holds to protect that gap. Use that to adjust. It’s up 97 cents.

Chinese names:

BABA had a big Singles Day but it didn’t respond well. Be careful because it couldn’t hold $187. If it breaks below $184, it could lose some momentum. Some might short there. $180.57 is support underneath.

JD gapped up but had no traction. It was downgraded this morning. See how it handles $40.85.

WUBA had a nice move as it cleared the $69-$70 area we flagged last week. It hit a high of $74.77. See if it holds the breakout to continue.

WB has a decent upper flag. If it can hold $110.40, perhaps it clears $110.50 for a continuation trade.

BZUN finally cleared the 50 day and its Pennant-type formation. Now see if it holds $33.50 to clear $36 at some point.

NTES is trying to consolidate above the $298 gap pivot. See if that continues.

Semis:

INTC is trying to find upper support after a massive run. See if $45.25 can hold for active traders to use.

QCOM turned down the AVGO bid but it cleared $65.79 to hit a high of $66.82. Traders are looking for a higher bid so it should be interesting.

AVGO had a big move from $250 to $281. It just pulled back to $261 for a Red Dog Reversal entry. Use that as support.

MU reclaimed the 8 day Friday and cleared $44.84 yesterday to hit $45.87. There’s not much to do now.

LRCX had a big upper channel. Some are long vs. $204. Some are waiting for it to clear $211.41.

Other notables:

ROKU had a huge move after earnings. It hit $47.49 yesterday and it’s up again today. I would not chase it. Perhaps today is the day it goes green to red vs. a 5-15-30-60 minute high. Maybe there’s a Red Dog Reversal, so be careful.

OSTK is heavily shorted but moving well. It cleared $48.50 after earnings and hit a high of $56.95 yesterday. It’s Hard to chase but just as hard to short. Use yesterday’s high as your pivot.

HMNY had a big move and is trying to find a second wind. See if it holds $11.50. If it can get and stay above $13.50, perhaps there’s another push to $14.20. A move and close above this can get it back in play.

TWTR acts decent. Some are long vs. $18.90. Above $20.58 and it looks better.

FSLR holds in well. See if it holds $60 to clear $62.56.

SPWR has a decent flag-type pattern. If it can hold $8.30, perhaps it can clear $9 for another move.

CSCO reports earnings tomorrow. We’ll see if it delivers to clear $34.50.

VRAY: we’ve been in it since $5.50ish. Yesterday it reported earnings. Holding $7.70 makes it easier to stay with. It’s been a great play for us.

Metals and miners don’t act special and bounces seem to get sold a bit quicker:

GLD has the 200 day at $120.08. Use that to judge the action.

Today’s Trading Focus

The tape is slower with less power and it’s much more stock-specific.

We’ll see if SPY holds above yesterday’s low. I’ll see if TSLA can continue towards $320.

There is no real setup in AMZN and GOOGL today.

I’d like to see AAPL perk up. If it doesn’t hold, I’ll use yesterday’s low to make adjustments.

Perhaps HMNY continues moving.

We’ll see if BABA holds yesterday’s lows.

ROKU may give a cute short, but I’ll be proceed very carefully there and only work a level vs. a level.

Positions Disclosure: Scott J. Redler is long TSLA, INTC, AAPL, HMNY, BAC, VRAY, INTC call spread, CSCO calls, TWTR calls, UA calls

Today’s Trading Calendar

Global Economic Calendar 

2:00am EUR German Prelim GDP q/q Exp., 0.60% Prior, 0.60%
2:00am EUR German Final CPI m/m Exp., 0.00% Prior, 0.00%
3:05am USD FOMC Member Evans Speaks
3:15am CHF PPI m/m Exp., 0.20% Prior, 0.50%
4:00am EUR Italian Prelim GDP q/q Exp., 0.50% Prior, 0.30%
4:30am GBP CPI y/y Exp., 3.10% Prior, 3.00%
4:30am GBP PPI Input m/m Exp., 0.80% Prior, 0.40%
4:30am GBP RPI y/y Exp., 4.10% Prior, 3.90%
4:30am GBP Core CPI y/y Exp., 2.80% Prior, 2.70%
4:30am GBP HPI y/y Exp., 5.20% Prior, 5.00%
4:30am GBP PPI Output m/m Exp., 0.30% Prior, 0.20%
5:00am EUR ECB President Draghi Speaks
5:00am EUR Flash GDP q/q Exp., 0.60% Prior, 0.60%
5:00am EUR German ZEW Economic Sentiment Exp., 19.8 Prior, 17.6
5:00am EUR Industrial Production m/m Exp., -0.60% Prior, 1.40%
5:00am EUR ZEW Economic Sentiment Exp., 29.3 Prior, 26.7
5:00am GBP BOE Gov Carney Speaks
5:00am JPY BOJ Gov Kuroda Speaks
5:00am USD Fed Chair Yellen Speaks
6:00am USD NFIB Small Business Index Exp., 104.2 Prior, 103
8:30am USD PPI m/m Exp., 0.10% Prior, 0.40%
8:30am USD Core PPI m/m Exp., 0.20% Prior, 0.40%
14th-17th USD Mortgage Delinquencies Prior, 4.24%
12:30pm GBP MPC Member Cunliffe Speaks
6:30pm AUD Westpac Consumer Sentiment Prior, 3.60%
6:50pm JPY Prelim GDP q/q Exp., 0.40% Prior, 0.60%
6:50pm JPY Prelim GDP Price Index y/y Exp., 0.10% Prior, -0.40%
7:30pm AUD Wage Price Index q/q Exp., 0.70% Prior, 0.50%
7:30pm AUD New Motor Vehicle Sales m/m Prior, -0.50%
11:30pm JPY Revised Industrial Production m/m Exp., -1.10% Prior, -1.10%

Earnings 

Before Open: SSYS

After Close: BZH, MTSI