Rising Wedge

Firstly, the after hours in GOOG was nuts. I don't know one person who didn't expect GOOG to outperform so I'm glad to see that the market isn't going to reward such obviousness (at least for more than 20 mins). Lately the market seems to be rewarding such behavior, which may be indicative of dumb money, but as they say, I'd rather be rich than right.

Easier said than done. It's still the same old story. It's stupid to buy at these levels but shorting hasn't been working out too well either. I'm convinced that as soon as I start buying breakouts, it will become fashionable to start selling strength and buying weakness again.

SPY remains in a rising wedge pattern (which 'should' resolve to the downside) but until that lower trendline is broken...


I still find AAPL intriguing. It finally closed its gap to the tick (from 09/26/08!) , several fibs seem to be collecting around its current level, and it's up 50% in a month but I don't know if I can bring myself to stand in front of this bus.

Tech Tock, Tech Tock

Is it finally time for tech to take a breather? After hours traders appear rather indignant that Intel won't offer any Q2 guidance. Ah but alas, Obama Von Spendthrift and his tax evading cronies did not give the chip-makers permission to cook their books...only the banks. This lack of guidance may become popular during earnings.
Intel was being looked to for reassurance that the economy was in fact healthier than ever - big surprise. If you believe the tide is turning, at least temporarily, take a look at AAPL and GOOG, who conveniently happen to be up against resistance (which will allow for a low risk entry).
AAPL

GOOG


I will remain patient and see how this week's earnings go. The last 27 days have, for good reason, made me more cautious than usual. The short term trend is still up but it is clear that overhead resistance is taking its toll due to the rounding/topping shape of the SPY. It doesn't mean we don't go higher but it may indicate it's finally time for that pullback.
SPY


Here are two short suggestions:
XLU

XLB

Unfortunately, the options on these kind of suck but fortunately, they are cheap enough to short outright.

VOLUME BY PRICE

The blue bars on the left (click on the SPY chart) represent the Volume By Price - which represents supply/demand - which represents support/resistance. Notice how perfectly the blue bar, 2nd from bottom, correlates to the most recent KEY LEVEL of resistance at 81.
SPY


Below are three good range bound stocks that can either be shorted on continued weakness or bought on strength.
USD


MA


AAPL

Friday

Today ended the worst week of the year (percentage-wise)
AAPL broke 85 but did close above it
Last hour of trading was suspicious
Perhaps next week will yield the illusive oversold bounce

The financials suck - it's stupid to short them down here and it's dumber to buy them...or is it the other way around? SKF is still a short with its 5 day RSI at 87.89 (cover when 5 day RSI crosses below 60)
SKF


2 day SPY

SPY below 75

SPY - closes below 75...that can't be bullish. Since most of my current strategies involve shorting strength, I will continue to await patiently for an oversold bounce.



AAPL - heading to 78.





BIDU - has plenty of room to fall - keep a tight stop at resistance



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Setups

The following are several low risk setups worth considering for a short-term trade:

AKS


TXN


GLW


GNK


STX


RS


TIE


AAPL


PG


LLL


GOOG


BIDU

Broken Support

In the intermediate term, and as expected, support at SPY 85 has finally been breached.


XOM broke


CVX broke


Finally, I've been rather adamant about support at AAPL 85 failing. It just sucks it had to happen like this. Now, my "there's no such thing as a quadruple bottom" theory will be dismissed for the "...hormonally imbalanced, menopausal Steve Jobs is taking time off from being CEO and that's why the price fell below 85" theory. Whatever. It would have happened either way.

Watchlist

XOM - Up against its lower trendline. You could go long with a stop beneath it; however, I would look to go short if/when the trendline fails.



CVX - same.



GLD - still bearish in the intermediate term.



AAPL - will ultimately resolve itself south of 85. Remember, there's rarely such thing as a quadruple bottom.



SRS - Get long (not necessarily a short term trade)



SKF - Get long (not necessarily a short term trade)



SPX - Actually looks okay on the 60 day chart but keep in mind the big picture. Plus, all of the so-called significant levels (920, 900, ...) keep failing so I wouldn't bank on any support levels on the downside. Overhead resistance continues to be dominant.

Update

There were a lot of significant breakouts last week - most notably SPX closing above 920.


In the short term I like the odds of a pullback but in the intermediate term this chart below shows where the market might run to (underside of magic orange line)while encountering tons of resistance along the way. And if the market is somehow able to climb to S&P 1000, that will present a magnificent shorting opportunity.


Being long AAPL with a stop under 85 finally paid off on Friday. This may have some more upside but I eventually see support at 85 failing.


BHI didn't work out quite as well, though remains extremely overbought.


After last week, both USO and GLD look to have given traders another opportunity to get short.

Apple @ 85

Watch where AAPL closes today. At the end of the trading day if it's above 85, go long, with a stop under 85. I would be a little apprehensive about going short under 85 just because of the oversold conditions. If AAPL does continue lower, it will likely retest 85 to the upside (as resistance) and provide another opportunity to get short, so don't chase.

Running Out of Room

IWM, as well as SPY and QQQQ continue to remain perfectly inside of its descending triangle...but not for long. It's running out of room and will resolve itself next week (expiration week). I've been looking at some reasonably prices debit/butterfly spreads and will post, if any present an attractive risk/reward ratio.

Some I'm looking at involve ICE, AAPL, GS, OIH, PFE, BMY, AKS, the list goes on and on and all candidates have a common characteristic: overhead resistance is substantial. Bounces and oversold rallies aside, I will continue to favor the downside until given a reason not to.

IWM

Apple

Couple points of interest with regards to AAPL:
50 day MA = resistance
Magic orange line = resistance
Selling pressure in the 105-120 range = resistance
17% bounce off of intermediate term support = ready for pullback

The news about WalMart selling the iPhone is old news and this will not happen before Christmas anyway. I would be more inclined to short AAPL, ignore the news, and place a stop above the magic orange line in case this half-assed bear market rally makes another run for it.

Decision Time

This graph suggests that it is about time for something interesting to happen...
SPY


AAPL


MMM


SHLD

Boobies

A couple of my booby traps were triggered today. This however sucks since both triggers are to the downside which I don't like after so much weakness in the market. For consideration:

ICE




















FSLR




coming up AAPL