Last week was a barn-burner for nearly anyone long equities. Holders of beaten-down energy names saw their holdings explode higher. ETFs like the First Trust ISE Revere Natural Gas (FCG), SPDR S&P Oil & Gas Equipment & Services (XES) and Market Vectors Oil Services (OIH) all surged between 12.5% and as much as 19%. Sure, these ETFs are still down huge on a 52-week basis. But over the past week, buyers have been active.
The only real losers last week were biotechs, bonds and the greenback. But rather than predict how these three instruments will perform in the coming week, let's simply recognize the Dx is trapped in chop between roughly 93.3 and 98. Bonds, as viewed via the iShares 20+ Year Treasury Bond (TLT), are a short on any near-term bounce toward $124-$125. And biotechs, as viewed via the iShares Nasdaq Biotechnology ETF (IBB), are in big trouble beneath 285.
As far as next week's trading is concerned, I believe we can all agree it'll be about earnings. Monday's quiet. But on Tuesday we hear from Johnson & Johnson (JNJ), JPMorgan (JPM), Intel (INTC), CSX (CSX) and Linear Technology (LLTC). Wednesday brings reports from Bank of America (BAC), Wells Fargo (WFC) and Netflix (NFLX). On Thursday we hear from Citigroup (C), Goldman Sachs (GS), UnitedHealth Group (UNH) and Schlumberger (SLB). The week ends with reports from General Electric (GE) and Honeywell (HON). (Bank of America, Wells Fargo, UnitedHealth Group and Honeywell are part of TheStreet's Action Alerts PLUS portfolio. General Electric is part of the Dividend Stock Advisor portfolio.)
I will try to cover some of the more interesting names (from a technical viewpoint) reporting earnings over in Trader Notebook. However, if there are any you have a specific interest in, feel free to shoot me an email.
Keeping in mind that Friday's E-mini S&P 500 futures auction was relatively balanced, we'll begin Monday's session with an eye toward 2011.25 and 2000. Day time-frame scalpers can fade those two areas as long as value remains within that roughly 11-handle area. But a break in either direction is not something I'd be in a hurry to obstruct.
Value migration beyond 2011.25 encourages additional bullish price extension, this time toward 2022 to 2025. Beyond that, we really begin focusing on levels closer to 2038.5 and 2050.
Failure to sustain a break above 2011.25 would be expected to kick-start some volatility, and encourage day time-frame traders to sell the Es through 2000, and down toward 1988.75. However, on at least the initial price probe, I want to look for reasons to fade weakness into the upper 1980s. From a value standpoint, price acceptance and a session close beneath the upper 1980s would have me looking for an immediate slide toward 1960.50.
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