US stock futures point on once again to a slightly higher open Tuesday, but remain below the last major resistance area before new multi-year highs. Pivot highs sit at $134 in the SPDR S&P 500 ETF (SPY
), and futures are dancing around that area this morning. A push above with volume could quickly bring new highs. The Fed's two-day meeting could provide the catalyst to push through, and its possible that move may wait for resolution from the meeting of the minds. The neckline is in place for the reverse head and shoulders in the S&P that would see a measured move to 1410-1440.
If that scenario plays out, we must give credit to another strong earnings season. Tech bellwethers have led the charge, highlighted by Apple Inc. (AAPL
) last week, which brushed off supply chain concerns in Japan, index rebalancing, and concerns over Steve Jobs to post a blowout quarter get back near all-time highs. AAPL may need a little more rest before its next leg higher, but it could lead the market to new highs.
Yesterday, Netflix, Inc. (NFLX
) was the next in line to report earnings, with the highly shorted stock seemingly needing a flawless report to maintain its lofty price level. The report was strong, with solid beats in EPS and revenues, but subscriber growth fell barely short of expectations and mid-point guidance was slightly below consensus estimates. The stock did indeed turn out to be priced for perfection, as NFLX is trading off around 6% this morning. Wait for NFLX to set up again, and we wouldn't be surprised to see more strength here.
The next report to watch for is Amazon.com, Inc. (AMZN
) after the close today. Last week both NFLX and AMZN came back on our radar after being a bit out of favor during 2011. AMZN was breaking out of a long-term downtrend, which provides a good risk-reward scenario for entries. Since breaking out of that descending channel, AMZN has jumped almost 3% into its report.