STTG Market Recap February 12, 2013

Stocks continued their very slow grind upward Tuesday, although the major indexes were mixed with Apple weakness once more pressuring the NASDAQ.  The S&P 500 gained 0.16% while the NASDAQ fell 0.17%.   News flow continues to be nearly non-existent this week, but tomorrow’s January retail sales should help provide some near term direction.

The S&P 500 has held the mini breakout of the previous two week range – the past two sessions have seen little giveback.

NASDAQ continues to play with those fall 2012 highs and thus far has been rejected.   This is the third session the index has been pushed back by that resistance.

Specific to Apple (AAPL), the CEO spoke at an investor conference and it was expected there would be some news on its cash hoard; when nothing of note was announced the stock rolled over.  Recall the stock broke over the $466 level to make a run up, so for the stock to see any form of bottom this breakout level needs to hold – the stock finished just above it today.  Longer term it remains a very broken chart.

While the type of stocks advancing Monday was more defensive, the market was led by more offensive type sectors Tuesday.  One sector that had been correction for a few weeks but woke up with vigor today was housing.

Financials continue their very impressive 2013 as the sector runs from one bull flag to another.

On the negative side we have Facebook (FB) which post earnings has been in a selloff.  The chart had formed a “bear flag” the past week (opposite of the bull flag we see in charts like the SPDR Financials above) and broke out of it to the downside below.

There have been two CANSLIM type “cup and handle” formations we’ve noted the past few weeks so wanted to run back by those to show how they turned out.  Both did trigger, although one – upscale retailer Michael Kors (KORS) was sloppy.  Just before it reversed up and out of its handle it broke down badly six sessions ago.  However it was the big winner of the day today on earnings:

Revenue rose 70 percent in the three months ended Dec. 29, fueled by the company’s so-called jet-set line, which includes handbags, wallets and watches, according to a statement today. Fiscal 2013 sales will jump 62 percent, the company said.  Profit excluding certain items will be as much as $1.82 a share in fiscal 2013, compared with a previous estimate of as much as $1.50, according to the statement. Analysts estimated $1.57 a share, according to the average of 14 projections.

The other, Home Depot (HD) has just triggered recently as you see the stock breaking out the handle part of the formation.  As long as that holds, this is a bullish condition.

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