AAPL Had A Nice Day

For the third day in a row, the indices came back from a gap-down open and closed fairly well. However it was the second deceptive day in a row with the major indices covering up some weakness under the surface.

The Nasdaq, for example, had 968 advancing stocks to 1629 decliners (and that isn't too impressive), but AAPL, which has a weighting of 20% in the Nasdaq 100, more than made up for the weakness in hundreds of smaller stocks. The NYSE had a similar situation, while the Russell 2000 was the laggard today due to the relative weakness in the bulk of smaller stocks.

It certainly wasn't a bad day, especially since we opened weak and closed strong once again, but it wasn't quite as positive as it looked. The main positive is that we are simply consolidating recent gains and we aren't seeing any aggressive selling. We are holding key support very nicely and doing exactly what is needed to set up a move through the August highs.

I'm a little concerned that momentum has been cooling and we have some sloppy action in many smaller stocks. We still have this major technical resistance around 1130 (where the market failed in both June and August), but we aren't rolling over either, and that makes it tough to be very bearish. It is still the bulls' game to lose here. As long as the S&P 500 holds 1115, it will be in very good shape. If we slip below that level, we'll have to reassess. But with names like AAPL and AMZN holding us up, that creates a little added confidence and keeps the bulls from taking profits.

long AAPL