Off the Charts

The market opened higher again today, and again hit the snooze button for most of the trading session. The indices have snapped-back well from Monday's lows, but traders have been somewhat frustrated due to the fact that most of the movement has come overnight. The perils of over-trading in the summer have never been more evident than over the past few days. The S&P finished the day up 0.62%, while the Dow and Nasdaq both climbed 0.77%. Not only has the lack of intraday power in the market caused some consternation for short-term traders, but it also doesn't add much conviction to the short-term bullish thesis. Yes, the market has erased a large portion of last week's losses, which is positive, but the gains this week feel somewhat illusory and could be the result of end-of-quarter window dressing. Last Thursday the market broke down out of the uptrend that has been in place since November 2012, and with this three-day bounce we are coming close to a re-test of that trendline. The question now is whether the S&P can build on this resurgent strength to get back into Thursday's gap and get all the way back into that uptrend. Next week is a holiday shortened week, but the action will be interesting nonetheless as we see if the market's snap-back was in fact the result of window dressing, or whether investors have made the judgement that the reaction to the Fed QE tapering announcement was overdone. SPDR S&P 500 (SPY) Source: eSignal View Chart » View in New Window » Gold's Meltdown Continues SPDR Gold Shares (GLD) bounced off a double-bottom in late May, but when it couldn't extend off that level, it was a red flag that perhaps the double bottom could eventually give way. The breakdown didn't take long. We talked extensively about that $130.50 as a potential flood-gate on a third test, and the deluge has indeed been torrential. Gold has been in a freefall since that break, only pausing slightly last week. Today, the ETF dropped another 2.0%, and the next support level of consequence doesn't come into play until around the $113 area. SPDR Gold Shares (GLD) Source: eSignal View Chart » View in New Window » The 20+ Year Treasury Bond ETF (TLT) had to scratch and claw to hold its gap up today, but the bounce was certainly not compelling. As we have discussed, economic data became much more important the day the Fed announced its intentions to take the foot off the QE gas. If jobs data, for example, comes in much worse than expected on the next report, could it prompt the Fed to change its tune? If that scenario played out, it could lead to a major snap-back in bonds. Conversely, if data is better than expected, it could hasten the Fed's departure, and thus potentially accelerate the breakdown of the EFT. Right now, though, I think we are in wait-and-see mode with the ETF. 20+ Year Treasury Bond ETF (TLT) Source: eSignal View Chart » View in New Window » Tesla (TSLA) has been highlighted on several recent Off the Charts newsletters, and today it showed impressive relative strength during the session. The stock finished up 3.34% and broke above the $107.13 pivot we had been watching. Now, the only real obstacle for Tesla is all-time highs at $114.90. It continues to have an extremely large short float, so even if the fundamental story doesn't add up at this point, it doesn't mean the stock can't squeeze considerably higher from here. Tesla (TSLA) Source: eSignal View Chart » View in New Window » ExOne (XONE) has emerged as the standout in the 3-D printing sector, and the stock gave another impressive extension today. 3-D printing has been labeled everything from a the next big thing to a fad, but T3 Live Editor in Chief John Darsie has always expressed an affinity for the stock because of its wide potential industrial applications compared to its peers 3-D Systems (DDD) and Stratasys (SSYS). ExOne has been a popular haven for T3 Live contributors like Steve Levay, who has traded the stock almost every day over the past few months. Today's 6.64% move makes it somewhat hard to chase short-term, but I believe it will continue to be in play the rest of the year as a trading vehicle. ExOne (XONE) Source: eSignal View Chart » View in New Window » Apple's (AAPL) stock has really jumped the shark, and warrants a mention today only because of how broken it has become. The former market leader showed relative weakness again today, dropping 1.08%. The only support level left now for Apple is macro support down at $385.10. Based on the action over the past few weeks, it feels like Apple could get there sooner rather than later. Apple (AAPL) Source: eSignal View Chart » View in New Window » Wells Fargo (WFC) is among the lower-beta bank stocks, but a good set-up is a good set-up. Especially for longer-term traders, I believe WFC provides perhaps the most sound risk-reward ratio in the sector, as the company does not expose itself to as much risk as some of its industry peers. The stock held in its upper range during recent market turmoil, and actually showed some power during today's session. With today's move it is now on the top end of its upper range and looks poised for a potential breakout. Wells Fargo (WFC) Source: eSignal View Chart » View in New Window »

Off the Charts

With this three-day bounce we're coming close to a re-test of November trendline.

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