As a Chief Market Strategist, I love to look at charts, analyze and discover swing trades in any direction. It is like going through old baseball cards and not sure when I will find the Mickey Mantle or Babe Ruth or better yet, sifting through sand or dirt and finding diamonds. The markets today are showing a little bit of weakness but the continued light volume is keeping them from selling to any significant point. The formation on the charts from yesterday is a clear triangle pattern which dictates consolidation from the up move early in the week. The big question is, which way will the markets go? Will we break through the key resistance at $115.15 – $115.30 or stall out, collapsing lower on the SPDR S&P 500 ETF (NYSE:SPY).
Jobless Claims were reported today in line with estimates. The Labor Department reported that initial claims for unemployment benefits fell 6,000 to a seasonally adjusted 462,000.
The strongest stock of the day goes International Business Machines Corp. (NYSE:IBM). It is soaring higher by 1.55% or $2.00. This is one of the key components of the DOW. As a result, this is probably adding close to 20 points alone to the index. With the DOW flat on the day, just imagine where it would be if IBM was flat. Probably -25 or so.
The massive resistance slam down play goes to Amazon.com, Inc. (NASDAQ:AMZN). AMZN is higher by about 2%. The stock has had a solid move up in the last couple weeks but is heading into major resistance. As a technical trader, I follow the charts closely. If you connect the 52 week high made on 12/03/2009 and the secondary pivot on made on 12/29/2009, that line will yield the current price of AMZN at $133.00 – $133.50. Be on alert, this looks like a short term top on Amazon.com.
The market continues to hover around the flat line. Keep an eye on IBM. Should it start to drop, the markets could fall back nicely. In addition, watch AMZN at current levels. A pull back on the daily chart is likely off this technical level.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
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