By: Scott Redler
Yesterday we saw multiple round trips with a close on the day’s lows. There were lots of good morning longs with the gap down that turned into a better shorts as market showed weakness. The only traders having success are those acting quick and taking trades. We are opening up a little this morning, but watch yesterday’s lows in most stocks for as your line in the sand. OIH absolutely got crushed yesterday, with banks getting a bit weaker and big cap tech taking a rest. We are now running out of wiggle room from here to 1040-1050 which is the huge technical support area.
Tech
AAPL was a great long in the morning then got pressured late, creating a bit of tail top. It’s up early today. If this gets pressured and goes negative today, I’m sure market will be negative and go through yesterday’s lows.
SNDK, VMW, NFLX all had new move highs. Make sure they hold break out areas. If not, put a tight stop in.
AMZN, RIMM, GOOG all are creating lower pivots with a defined floor. Watch how they handle those areas.
Banks
GS acted well in first hour, then failed to make new highs with the futures, giving me clues that market might not hold up. Then the banks got pressured. Watch this to see if we hold the up open.
JPM showed morning weakness, also giving clues that yesterday’s reversal wasn’t going to hold. This was upgraded this morning by UBS, so see if it holds.
Casinos are acting okay. They bounce with market and go down with market. Not compelling right now.
Miscellaneous
OIH got absolutely CRUSHED. It’s up a dollar or so this morning. Watch yesterday’s low for a 80-20 type trade. If it can’t go negative today it could be a good scalp long just for the day or so. If it goes through and comes back up—you know the drill, buy vs. today’s low.
BP is up small, see if it holds. Same strategy as above with OIH.
GLD had a nice bounce from 115 to 120. It can use a rest.
You need quick feet in this market. The macro bearish head and shoulders is having a hard time building the right shoulder, showing that maybe we are just that weak. Look at chart I attached from May. We were long from the short term double bottom and sold Friday at 1103, that is a very shallow shoulder. Either we hold today and continue to build right shoulder or just slice through support quicker than anyone would be prepared for. 1040-1050 is the huge support level.
