Apple finally lands China
Index & Sector performance 12/23/13
The Market:
The market was able to produce a gap higher to start this shortened trading week which will include a half day of trading Christmas eve and the market will be closed Wednesday December 25th in observance of Christmas. After the gap itself the S&P remained in a roughly 4-5 point trading range the entire day on light volume.
There was a fair amount of economic data released today but nothing that really tipped the balances. Core PCE and Consumer spending came in right at expectations while Personal Income slightly missed (0.2% vs. 0.4% est.). University of Michigan Consumer Sentiment posted an 82.5, same as last month, but expectation was for a slight increase to 82.9. Tomorrow we get the Core Durable Goods, Home Price Index, New Home sales and the Richmond Manufacturing Index.
In the News:
Darden Restaurants (DRI) was helped today closing X% higher after activist shareholder, Starboard Value, reported a 5.6% stake in the company.
Apple (AAPL) gained 6.38% after announced something that investors have been waiting for, a deal with China Mobile (CHL). CHL which has over 7o0 million subscribers.
Men’s Wearhouse (MW) expressed shock that Jos. A. Bank Clothiers (JOSB) rejected their $55 per share offer and stated they will continue to review options including nominating director candidates at the next shareholder meeting.
United Therapeutics (UTHR) gained X% on an FDA approval.
Xyratex (XRTX) agreed to be acquired by Seagate Technology (STX) for $13.25 in an all cash deal which represents an over 26% premium from Friday’s closing price.
Analyst Comments:
Upgrades 12/23/13
Downgrades 12/23/13
Initiations 12/23/13
Price Target Changes 12/23/13
The Game Plan:
The next two weeks will be holiday trading so many patterns and moves will not likely be confirmed by volume.
After the knee jerk reaction from the Fed minutes was to sell taking the broad index down to the 50 Day SMA, the bias has been strongly to the upside and it is very possible that bias will continue through holiday trending as low volume periods will often drift in the direction of the prevailing trend.
While we can all see that we are stretched and in the midst of a strong upward move, any pullback to the recent breakout level around $1810 with a support range of $1800 – $1815 appears to again be an opportunity to look for long trades and above those levels the market has an upward trading bias. Below that range and the market is left vulnerable for further downside.
We mentioned this last week but there is the potential for a slow week of trading after the Triple Witching. Along with the shortened trading week and lower volume expected it is possible this week and maybe next will not produce much in the way of strong moves.
SPX 60 minute chart