Off the Charts

The market finished in positive territory Thursday ahead of tomorrow's jobs number. The Nasdaq was the strongest, gaining 0.52%, thanks in large part to Apple's (AAPL) potent negative to positive reversal. The stock was down about 3% again today following yesterday's harsh sell-off, but bounced hard to close the day up 1.57%.

Besides the fireworks with AAPL, it was a fairly lackluster day after the morning reversal. Stocks pushed higher in the first hour of the day and then momentum petered out over the rest of the session. The S&P (SPY) is holding up well since Monday's reversal as it digests above 1400. A good jobs number tomorrow could propel the S&P above 1420. There are some decent chart patterns setting up so be patient and ready to react when they trigger.

Tomorrow's non-farm payrolls number, which is released at 8:30 a.m., could give clues to short-term market direction.

S&P (SPY)

Source: eSignal

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Apple: Double Bottom or Head and Shoulders?

Apple saw a potent 80/20 Red Dog Reversal trade today, relieving some short-term pressure. This stock gapped down at the open and traded down as much as 3% on the day before putting in a pivot low of $518.63 and staging a ferocious comeback.

AAPL closed the day up 1.57%. Today's action was a strong oversold bounce on solid volume, which adds credibility to the move. However, on a longer-term basis AAPL still has a lot to prove after its recent volatility. AAPL bulls will be saying today's candle put in a higher pivot low, while AAPL bears are pointing to a macro head and shoulders pattern that could be forming.

Apple (AAPL)

Source: eSignal

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Could a macro head and shoulders pattern be forming in AAPL? This stock fallen from traders' good graces in the past month-and-a-half, accelerating to the downside and losing support of its key moving averages. AAPL has shifted from being a reliable swing long candidate to merely a short-term cash flow trading vehicle.

The right shoulder of the potential pattern could be in the works now as the most recent bounce up to $594 showed overall weakness. AAPL failed to take back the crucial 200-day moving average and stayed below the 50% Fibonacci retracement level from the September high to the October low. This pattern will take time to develop but the longer AAPL stays below the 200-day moving average the greater the chances this pattern comes to fruition.

Apple (AAPL)

Source: eSignal

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The Financials Rested After a Powerful Move Yesterday

Bank of America (BAC) rested today after soaring higher yesterday above the $10 breakout price. This stock looks good to continue higher. JPM and WFC, which were highlighted yesterday, also rested today and should be on the radar tomorrow for potential longs at their trigger buy prices.

Bank of America (BAC)

Source: eSignal

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Trade Set-ups

Salesforce.com (CRM) continues to hold up well since earnings on Nov. 2. The longer CRM stays above $155, we believe the greater the chances it successfully breaks out above $160. This stock has been consolidating for several sessions and could see resolution soon.

Salesforce.com (CRM)

Source: eSignal

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Equinix (EQIX) closed the day up 3.25%. This stock has been trending higher this year and could be ready for a move higher after this recent pullback. EQIX needs to trade above $189 to set this trade in motion.

Equinix (EQIX)

Source: eSignal

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Facebook (FB) triggered as an 80/20 Red Dog Reversal play on Monday with entries at $28 and stops at $28.88. This stock has held under $28 and could be ready for an additional move lower below $26.68.

Facebook (FB)

Source: eSignal

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Netflix (NFLX) is holding up well since the potent move higher Monday. The longer this stock holds above $81 to $82, we believe the greater the chances it gives us a trade above $90 to fill a portion of or the entire gap. The gap gets filled at $101.79.

Neflix (NFLX)

Source: eSignal

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At the time of publication the author is long AAPL, BAC, JPM, YHOO, MA and short SPY.