By: Scott Redler
As I come back from vacation and I look at all the charts, I see two very conflicting patterns. Short term, the market was oversold enough and technology got hit hard enough that the “Intel bad news” was bought. Also, after a week of GDP Doom and Gloomer’s the report was a bit better than predicted. Combine that with
Bernanke saying they will do “all they can” and the market staged an outside Red Dog reversal.
Not sure if we will build on it but there are some key levels to watch. The 50% bounce level from the downdraft from 1100 to 1039 stands at 1069-1071. If bears have control they will not a let a daily close above this level, and then the ultimate line in the sand is 1075-1077.
On a macro level, if you take a bigger look at the chart, there is a very negative head and shoulders pattern (I know, it never triggers). That could give us a
test of at least the old lows of 1010 with a measured move still down to 880-920 but we have to take out and close below 1040 first and then 1010.
I sold all macro longs on August 11th at 1105ish and will just trade, until I see a clear defined move coming. Right now – Trading these 30-40 handle technical moves have been paying off very nice.
Tech
AAPL was a great stop out around 255 and some got short when we broke 252. As of now, it still feels heavy but prudent shorts covered into 235-238 support. Resistance here is now 244-246. This will give us clues if market can build on Friday’s reversal.
BIDU held it’s 50 day, but not excited here. Next Resistance area is 81-83
NFLX still a “go to stock” but a bit weaker. It held long term uptrend around 120ish, and now has a small pivot around 127. Big resistance around 129-131.
AMZN held the 122.50 area which was a prior buy for us. This holds in better than most, but hard to get excited.
SNDK- This Former “go to stock” had a complexion change when AAPL started getting weaker. You should have been stopped out when 40-41 broke. It was upgraded today but I would be surprised if it gets much traction.
RIMM this is a great trader for us, but you must be quick and nimble. It remains weak but I guess you can trade long vs. 45.
HPQ we dissected this trade well. I tried to keep everyone up. We bought 40.20’s and sold last shares around 41.45, now it’s lower and still broken.
CRM looks great, with a nice high level flag. If market builds on Friday, this might get thru 113-114.
FFIV acts very Well and needs some time, but is now on the list.
BANKS got hit hard
GS was a great sale for us around 154 -155 and now worth a scalp look long around 137-138.
JPM very slow but held my 35.50 buy area, now it could bounce a bit back to 38
BAC remains very weak.
V and MA hovering near lower end of ranges. Visa trying to stay above 70 and MA 200ish.
CASINOS
LVS act well and is holding up. Keep on list.
WYNN not great but keep an eye out.
OIH had a big engulfing bar and could bounce if market holds in. I see big resistance around 102.
RIG could be worth a scalp with buy area 51.50-52, but just a trade.
CMG has a great looking chart. Very strong, not sure if stock can break out but this one should be on radar if it gets going above 154.
POT still acts well as this was our strong group before the “take over announcement”.
CF and AGU look like they are playing a bit of catch up.
GLD is building a great pattern most are in tier two long with average of about 118.50.
Market needs to get above 1070ish and HOLD to relieve the short term pressure and building on Friday’s Reversal.
