By: Scott Redler
The market is opening right near yesterday’s highs. This type of action frustrates me most. Any trader looking for follow-through on Friday’s reversal probably got stopped out at some point yesterday as the market came under pressure. At the same time, anyone who went home short as we closed on lows is going to have a complicated morning.
As of now, according to IBD, we are still in a “New Rally Attempt” with Friday’s reversal considered Day 1. From here, they are looking for a gain of 1.2-1.7% to confirm the rally. That would put us back in their big picture section, with the caveat being that not every new rally attempt leads to a major run. However, no major run starts without going through this process. Follow-through is supposed to happen in days 3 through 7, and this would be considered early if it holds.
The Rundown:
- Tech opened strong yesterday and kind of failed.
- Google (GOOG) is trying to break its lower descending channel. It’s hard to trust, but if it can trade and hold $538-542 on nice volume, we could see $555ish and higher if this holds.
- Amazon (AMZN) was strong early and failed at the $120-121 resistance, so it’s tough right now.
- Apple (AAPL) is also caught in a lower range that should be resolved soon. $190-194 is support and $197-200.20ish is resistance.
- Research in Motion (RIMM) continues to hang tough, but I would only buy dips.
- Cisco (CSCO) is a buy anytime this market tries to rally.
- Baidu (BIDU) reports earnings after the close. Take care. Technically it looks very strong, which might anticipate a good report.
- The banks were very weak yesterday, but European banks are up big this morning on the “bailout talks”–take a look at Deutsche Bank (DB) and Credit Suisse (CS), etc.
- Goldman Sachs (GS) was under pressure. $149-151 is an important support zone. It’s hovering in the lower end of the range, so watch this closely to see if the market can hold the gap-up. Resistance is in the $154-155 zone.
- JP Morgan (JPM) is also a very ugly chart–not compelling.
- Bank of America (BAC) is not a comfortable long below the $15 level.
- Commodities are very oversold. Gold will be opening up today, and has room to about $1,080 (or $106-107 on the GLDs).
- Freeport McMoran (FCX) and U.S. Steel (X) are caught in a lower “box type pattern” with small trades being okay in that zone.
- The Dollar is very overbought right now, so watch this closely.
- The S&P needs to hold 1,060-1,064 in order to neutralize yesterday’s down move. Resistance is 1,071-1,073, with the major area checking in at the 1,080-1,085 area.
The next 48 hours will be a very important tell!
