Well guess what? That 1357-1358 level (red arrow) was tested today. This is what I have said would be the first level of support. The S&P tagged that level as it broke the white uptrend line that we discussed on the video last night. However, it did mange to bounce and regain the trendline. I am seeing a potential right shoulder on the SPX though. The neckline is around 1340.
The market got crushed today on weak European economic date and slowing in China. AAPL broke its 50 day moving average today (first time in many months), but managed to retake it by about a buck thanks to a late day rally. Most of the ETF’s that we talked about last night broke hard, but manged to close near the highs.
The tape is still jittery and much depends on the success or failure of Apple’s earnings report tomorrow after the close. We also have moving parts by way of economic data this week. Housing numbers, consumer confidence and “The Bernank” take the microphone this week. Maybe QE3 chatter will heat up again as some of the data of late has been weak. TXN reported after the close and the number was decent.
This French election is getting interesting and if the Socialist party wins they will raise the tax rate to 75% on folks making over one million euro’s. My heart bleeds.
There is always a wall of worry and frankly I think the market was just looking for an excuse to let some air out. That doesn’t mean we wont test 1350 or 1320 first on the S&P.
It is very possible that we see a strong “turnaround Tuesday” tomorrow, so sit tight. We made a couple of day trades on the chat room today with ERX and OIH and closed them out. Some of the short ideas I put on the blog last Thursday evening have started to work; CSH, A, and WTW to name a few.
ACI, Our first “longer term” idea triggered today. I told you guys that my buy range was 9-9.50, so I will split the difference and enter it on our sheets at $ 9.25.
Hang in there and I will see you in the chat room in the morning.