The bulls pushed for some upside today; will it last? Has the "tone" changed for the time being? Probably for the time being bounces will most likely be sold, rather than embraced. The skittish shorts may be squeezed a bit as well, but more aggressive sellers may be lurking above, much as the dip-buyers were lurking under this market for so long during the uptrend off the March low.
It has been a very deceptive day, with the senior indices looking much better than the overall market. Small-caps did not act well, and breadth stayed close to 2-to-1 negative. Retail and biotechnology led, but it is disappointing that semiconductors can't seem to get going despite some good news in that group. Consumer staples like CL and GIS are doing well, but oil and commodities were the obvious big drag today.
I have a massive position (for me) in AAPL on the long side - see the note today - as I believe it's ridiculously cheap. Overall, it is muddled action with a negative bias. The dip-buyers are obviously weakening, and if you chase strength on a short-term basis, you'd better be ready to flip pretty quickly or you'll end up stuck. Having stated that, however, I was compelled to add to my BAC and AAPL longs today, as I believe both will be much, much higher in the future.
long BAC and AAPL
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