Good morning y’all. All is right with the world this morning as the Chargers blew a 21-point lead against the Texans and S&P futures are ripping on news that Syria has agreed to a Russian initiative calling for the country to turn over its weapons stockpile. Futures have traded in a wide 10 point range but are sitting on the highs this morning near 1680 as it looks like we are heading for another big green day. Just about every name on our watch list is in the green this morning with the exception of Gold $GLD and Blackberry $BBRY. Blackberry likely needs a breather after a big rally yesterday and fear is dissipating from this market as the Syrian situation appears to be dwindling.
The teen retailer Five Below $FIVE blew away earnings and is trading roughly 13% higher this morning. Teen retailers have had an absolutely abysmal summer including Abercrombie and Fitch $ANF, Aeropostale $ARO and American Eagle Outfitters $AEO, but I guess teens have to buy their clothes somewhere. As we mentioned yesterday, Apple $AAPL will obviously be in the spotlight today as it kicks off the first of two major events that will likely define the company’s near-term success.
Our momentum long in $JASO could be poised for a breakout today after news came out this morning that the company is delivering 96 MW of solar power technology to China. Again, $9.50 is the level to watch there, and then watch for a move over $9.75 that could send $JASO to $10 and beyond to the year to date highs over $11.
Keep an eye on $NFLX today early in the session. If the stock can get over $299 with volume it should challenge the $300 level and beyond.
We’ll probably take another hit to our positions in $HD and $T today as the broader market continues to rally hard, but the thesis for those positions remains intact. Tapering is a matter of when, not if, and those names will certainly be impacted by those effects. The September Fed meeting should provide some answers there. We’ll watch the levels closely in case either name can reverse course with some commitment, but for now we aren’t too worried about a two day rally. Risk happens fast, and we’re more concerned about making money than being right, so if these positions turn on us we won’t be ashamed to cut our losses. Trade the market you’re given.
Don’t rush into any positions today to the long side unless the market can hold this gap up for the first 30-60 minutes of the session. There will likely be opportunities to take both tactical longs and shorts in a number of names, but the key is to be tactical. It looks like we may have cleared the Syria headwind, but President Obama is still set to speak tonight at 8 PM CST on the situation. Obama hinted that he is supportive of the Russian-Syrian initiative, but he remained skeptical of Syria commitment. Still, this mornings headlines appear to jive with the notion that Syria is willing to cooperate to avoid military action from the United States.