It looks like the Head and Shoulders pattern in SPY is coming to fruition. The neckline stands at $127/$127.50, with a target area of $120-$117. This morning we saw a big gap up in the market as there was some resolution to the debt ceiling, but the highs of the day were in at 9:30am ET, and the market continued to get hit after a very weak ISM number. SPY traded below Friday's low and through the 200 day moving average, however it closed above both levels. If this pattern is to play out, it would be nice to see some sideways action first.
AAPL is a go-to stock for strength after a blockbuster earnings report this quarter. AAPL was highlighted last week for potential buy back areas. It held the first area which was the low from its earnings gap and also the 10 day moving average. AAPL showed a lot of relative strength today as it closed +1.65% when the SPY closed around -.65%. It is always difficult to buy the dips when they present themselves, but that is why you must be prepared and know key levels. For now, use AAPL as a cash flow stock as there is no real set-up on the chart and could be difficult to make new highs, while the market corrects.
This ETF remains bullish as it trades above key moving averages. One level to test a buy back is the 100 day moving average at $153.71 and then next level will be the 50 day moving average at $150.81. The OIH's did put in a bearish reversal candle on the daily chart, signaling it may need a little more time before making another move.
AMZN, another go-to stock for strength, had been holding up well after gapping up to new highs after the earnings report last week. It had a nice 3 day basing pattern that usually ignites another move higher, but failed to hold that new highs, although not unusual as the market was pressured today. For now, AMZN is an avoid as it needs more time.
GS had a powerful snap back two weeks ago when it failed to hold a new 52-week low. Now GS is holding around the 50 day moving average and above the break of the descending trendline. Something to note, GS did not break its low from Friday ($133.13) but the SPY did. Use the $133 support level as the reference point.
GE is trading below the $18 support level, which is not surprising after we saw a big miss in the ISM number that came out at 10:00. It was a full 3.6 points lower than expected. GE is showing bearish signs on the daily chart as it trades below key moving averages and makes a series of lower highs.
The XHB is the homebuilder's ETF. For all of 2011, it had held the $17 level, but broke that Friday. This head and shoulders pattern in XHB is very bearish. The neckline stands at $17, which it closed below today. This pattern has now triggered and targets a move down to $14.80, use your own trading rules to take profit on this trade.
No comments:
Post a Comment