Pinterest is turning into a dark horse of sorts, as you can see on the graphic below. The year-over-year percentage of social shopping sessions is shifting away from Facebook and towards Pinterest. True, one year-over-year graphic does not a trend make. But Pinterest may have more going for it than people think
Regarding Facebook, they have earnings coming up tonight and I suspect bulls will need to hold $25 as a floor here.
One subtle divergence playing out today is that while gold, silver and the primary precious metals miners are all getting hit in textbook fashion after recent low volume bounces, Freeport McMoRan is resisting another rollover.
As you know, Freeport has some gold exposure but is mainly a premier copper mining giant. Even as copper, lumber, and crude futures all get hit, if the related stocks can withstand it without another leg lower it may be indicative that their recent spring swoons had effectively baked the bad news in the cake. Mind you, we need more information throughout May to really get behind this thesis.
But Freeport is not acting quite by the book today even as the GLD chart looks as textbook as it gets.
I am also watching CAT to see if it can prevent another break below $80.
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Small caps, transports, and homebuilders are clearly lagging early on, all three former market leaders which still merit your attention. The most logical reaction to the selling this morning is to look for a standard late-spring broad market correction to materialize. If that is going to happen, however, we will likely need to see dip-buyers get punished far more harshly than they have at any time in 2013. Overall, traders who have taken on the risk and bought support have been rewarded fairly well this year.
At the same time, the market has been skittish in holding a clear, sustained trend higher over the past few weeks. That type of action usually compels traders to trade around positions, such as what we did with the BBRY long inside 12631, scaling profits into the spike earlier this week. Indeed, staying agile and small in this tape still appears to be the name of the game.
Gold and silver also look to be rolling over for some unfinished business at recent lows. But the emerging market and materials stocks are not getting hit quite as badly as you would think given the weakness in many commodities.
Headed into the afternoon, I am on the lookout for both longs and shorts, keeping cash levels still relatively high. Bulls would likely need to see today be the brunt of the selling before charts cool off the rest of the week, while bears of course are playing for the big May rollover, starting today.
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Headlines and government data continue to point to a housing recovery, yet working through the housing and housing derivative plays has turned into a maze of sorts. Specifically, even as lumber futures get hit, the homebuilder sector is trying to catch its breath after yet another stunning recovery from a steep sell-off.
While that plays out, select ancillary plays on the housing market seem to be enticing inflows here. Specifically, the following three ideas all have discernible housing sector exposure and are sporting intriguing technicals. I like them on further strength.
HVT is also a quality chart to watch, though they have earnings on Thursday.
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