By: Scott Redler
Yesterday’s rally felt like the day the Fed bailed out Freddie Mac (FRE) and Fannie Mae (FNM)–we gapped up, yet the rally lacked power and leadership–then a few session later, the market fell apart. The banks continued to stay weak yesterday, and tech had no power at all. So, in my mind, this was still just an oversold bounce until proven otherwise.
Resistance #2 at 1080ish capped the market yesterday. Bigger resistance, or the LINE IN THE SAND is in the 1085-1090 zone. I see a ton of “wedge-type” formations, which are tight patters that get resolved with a directional move. Be on the lookout, the next break could be key.
The Rundown:
- Apple (AAPL) is still trapped in the lower box–support is $190-194 and resistance is around $197-200.20. The range is getting tighter, so look for a directional move soon. This will give us clues on whether we build on the 1,044 low in the S&P, which was about 9% off the highs, or if we go down and test or break that level. Watch price action closely.
- Amazon (AMZN) has a very similar pattern. It too is getting very tight in the $115-120 area. We need to see which way it breaks.
- Google (GOOG) still has a defined pivot area in the $540-542 zone. It needs heavy volume to break out and has been frustrating lately.
- Baidu (BIDU) is up $40 points. Last quarter it was down huge and rallied back aggressively off of earnings. This time, let’s see if they sell the news. I would use $470 as a pivot. If it breaks, try to short and see if that area then holds as resistance. It just be choppy to the upside today though.
- Goldman Sachs (GS) was weak all day yesterday. It broke $151 and looked like death before the huge buy program kicked everything higher. Continue to watch action here–$150-151 is important support.
- My eyes will be on the financials. JP Morgan (JPM) and Bank of America (BAC) were also very weak throughout the day.
- VM Ware (VMW), Cree (CREE) and Intuitive Surgical (ISRG) are three of the strongest chart patterns in the market. All three beat earnings by a healthy margin and have looked great since reporting.
- Watch 1,060-1,064 as a short-term support area this morning. If it doesn’t hold, we can definitely see some volatility.
- I’m hoping that the “Greece Bailout” is not the start of something bigger. If so, things could get real ugly in no time.
- It’s nice to see that Mother Nature shut down Washington–they didn’t get the message from Massachusetts, maybe they will learn from “Mother Nature’s Time Out.”
