Some out there are obssessed with technical analysis, so here's some: Given the damage done yesterday, the market did a poor job of snapping back today. Once again we couldn't even manage to hold onto a little rally attempt late in the day. That was one of the main drivers when the market was acting well a couple weeks ago and now the late-day buyers are lacking the confidence to chase higher and generate a squeeze.
The biggest positives today were gold mining, steel, coal and energy, which were moving mainly on renewed weakness in the dollar. The bounce in oil was actually quite limited in view of how weak the dollar was. Retailers and semiconductors were the laggards while financials and homebuilders churned. AAPL fell again; I think it's a compelling buy up to $145....
The momentum plays have died out completely over the past week and today's action did nothing to revive them. In fact many of the things that were strong today like agriculture and coal look like good potential short setups rather than the start of sustained reverses to the upside.
Technically the big level on everyone's radar is 900 on the S&P 500. As well as being a big round number, the 50-day and 200-day simple moving averages have converged there. We were unable to trade back over that level today, but I think we'll pop back over it in the next few days and trigger some buy-stops.
I suspect the bears will then be waiting to reload some shorts but that they may not stick around too long with the end-of-the-quarter window dressing fast approaching. It should be a good battle, but the bears are gaining the advantage.
Keep in mind that the trend may be turning down and traders may be focused much more on selling strength rather than buying weakness. Without some of the pockets of momentum that were working so well a little over week ago, the long side is turning into nothing more than some quick flips. Buy AAPL.
long AAPL
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