Markets were seeing significant upside this morning, but the rally was stalled by a glitch in the Nasdaq exchange prior to lunchtime. Trading in those stocks has been halted since then, but the NYSE issues remain open. Since the halt, markets that are open have dripped slightly lower, but remain higher on the session. This news is trumping some better-than-expected overnight PMI data, which started the rally in futures at about 2:00 this morning. Currently, the Russell 2000 is leading markets, up by over 1% on the session. The S&P 500 is higher by 0.7%, while the Dow is 0.3% higher. Gold and silver are slightly in the green today, while bonds are up about 0.2% since yesterday’s close.
CHART OF THE DAY
JDS Uniphase (JDSU) – The networking concern has traded in a choppy range this year, and is currently near breakeven since early January. The shares recently reported in-line earnings, but the market reaction was negative, indicating that sentiment could potentially be a bit too bullish toward the stock. Since that move lower, JDSU has consolidated underneath its 200-day moving average, a trendline that could act as resistance going forward. This offers a nice bearish entry with defined risk.
I like a bearish entry here with a stop on a close above 14. I would initially target a move down to 12.50, with 10 as a stretch target.
WHAT I’M EXPECTING
There are still two key resistance levels overhead that the S&P 500 must retake to get me back in the bull camp – 1660 and 1675. I will continue to look to sell bounces until that breaks to the upside. That said, the market is setting up in a potentially bullish inverse head and shoulders pattern since its move lower, and a break of those levels could spark a nice rally. I continue to focus on individual stocks and do my best to ignore broad market action.