Off the Charts
The S&P (SPY) tagged 1500 intra-day but failed to close above that milestone. The S&P closed the day flat while the Dow finished up 0.33% and the Nasdaq fell 0.74% as Apple's (AAPL) weakness weighed heavily on the index.
As of the close today, the S&P has rallied 4.7% in just the first three weeks of 2013. The market has seen a methodical move higher this year although a lot of people are perplexed at the rally as the speed and trajectory have been different than what we have seen in the past. A few key players that typically lead the market have sat on the sidelines while strength in the financials, transports and industrials have led the way higher.
So far this year there has been solid sector rotation, but some key leaders along with the S&P are starting to become extended from their short term moving averages. If you have been booking profits along the way, you are potentially less involved than you would like to be, but there have been few compelling spots to get back in. As stated many times before, the trend is your friend and it will be important to see what today's slight push through failure leads to. Was today's doji close just a pause in the rally or will it lead to a pullback?
A rest or pullback would be welcomed as there are a lot of large price gaps in charts due to earnings. New bases need to be formed for us to identify compelling set-ups.
S&P (SPY)
Source: eSignal
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The PowerShares QQQ (QQQ) closed the day down 1.38% as AAPL's poor earnings report weighed heavily on the index ETF. Earlier this week, the QQQ's were highlighted on Off the Charts as a laggard index ETF as the SPY, iShares Russell 2000 Index (IWM) and Russell 2000 (RUT) were all trading at new yearly highs and the QQQ's were trapped in the middle of the yearly trading range. The box pattern was highlighted, and we saw a false break out of that pattern on Wednesday. What will that breakout failure lead to? The lower end of the range comes into play around $66.17 to $66.33, which has been acting as support. Will that level hold as support this time around?
PowerShares QQQ (QQQ)
Source: eSignal
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Apple Closed on Lows, Down 63 Points or 12.35%, After a Lackluster Earnings Report
Although the earnings report was decent, it just wasn't enough to save this fallen leader. Apple was a gap-and-go to the downside today. It has been stated for some time that this is a broken stock and after the report that still remains the case. Apple has a lot to prove at this point and is not worthy of a swing long, in my opinion. At this stage, you could use this as a vehicle for cash flow trading, but that's about it. Active traders now have two new points of reference to trade against of $465.73 and $450.25.
Apple (AAPL)
Source: eSignal
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Apple accelerated lower on a lackluster earnings report today as it broke the uptrend line on the weekly chart that has supported this stock since 2009. The next real levels of support on the weekly chart are $420 to $426 and then $350 to $356. Do not try to pick the bottom in this falling knife trade.
Apple (AAPL) Weekly
Source: eSignal
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Goldman Sachs Is Due for a Rest After Today's Action
Goldman Sachs (GS) has seen a steep rally since breaking above the $126 level and accelerated higher following earnings this quarter. There was a push-through failure at new move highs today, which could signal a rest is due after a strong rally.
Goldman Sachs (GS)
Source: eSignal
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3-D Printing Names Could Be on the Radar for a Buy on the Dip After Three Down Days
Stratasys (SSYS) has been on the move recently. There has been a three-day pullback off highs in this strong stock and you could look to buy the weakness. Support No. 1 is $81 to $82 and then Support No. 2 is $77 to $78.
Stratasys (SSYS)
Source: eSignal
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Gold Is Still Trading Within the Descending Channel.
SPDR Gold Shares (GLD) is still trading within this wide descending channel. This trade could take more time to develop as it continues to find resistance at the upper trendline. The potential long trade triggered above $163.20 to $164.00 last week, but a close above $164.50 would get me more excited about potential further upside.
SPDR Gold Shares (GLD)
Source: eSignal
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At the time of publication the author is long LNKD calls, WFC, GE, LNKD, MGM, WMT, DBC, and short SPY, GS.