By: Scott Redler
With distribution days adding up, we have to start asking some questions. This morning we’re seeing some Dollar strength, as well as the breakdown in some commodities. Decent earnings have been sold off–this started last week with Intel (INTC) and JP Morgan (JPM) and has continued with IBM (IBM).
Tech is having a lot of technical trouble right now. One day we see Apple (AAPL) plow higher with no sellers, the next we see it sell-off without any buyers. This is just one example of that choppiness highlighted this morning.
With China pulling back on bank lending and JAL filing for bankruptcy, we are not seeing bad events having a negative impact on the market for the first time in a while. This market has been incredibly resilient in shrugging off bad news. This 1,128-1,132 zone is VERY important as it coincides with the uptrend that started in early July. Prudent traders took their size down in the last few days and hedged some of their exposure. Now we need to learn whether this is a complexion change, or merely a pullback, before taking the next step.
