Markets are fairly quiet today, after the big move higher earlier this week. There was little overnight news to move stocks, and today appears to be a day of consolidation. The day’s major move is coming in the metals markets, where gold and silver are both significantly lower. At present levels, gold is off by about 2.5% and silver is 4.4% lower on the session. Stocks have traded in a range today, and are currently near the middle of that region. Today’s leader in equities is the Nasdaq, higher by 0.1%, while the relative laggard is the Russell 2000, which is 0.4% lower on the session. Bonds are slightly higher on the day, up by about 0.2%, but are sliding to the lows after today’s 30-year auction.
CHART OF THE DAY
Take Two Interactive (TTWO) – Shares of the software company have been very strong this year, higher by about 60% since January. Yesterday, TTWO was downgraded and the shares sold off sharply, offering a nice entry from the long side with limited risk. Despite its strength, skepticism remains toward the stock. Currently, 16% of TTWO’s float is sold short. This creates the potential for future short-covering rallies should TTWO resume its trend higher.
I like a long entry here with a stop on a close below $16.85. I would initially target a move back to 19, with 22 as a stretch target.
WHAT I’M EXPECTING
I think we’ll likely see a small pullback into next week’s FOMC meeting, as many traders will want to lock in gains ahead of that headline event. Beyond there, much of the action will largely depend upon what the Fed has to say, which is a coin flip scenario, in my opinion.