The S&P500 is resting after the recent run up and AAPL lost its mojo.
Stocks closed under 1500 on elevated volume. Today was the third down-day out of the last four as the hangover from the pervious euphoria is catching up with the market.
Everyone knows the market cannot go up forever, so some selling is normal and expected, but what we really want to know is if this is where the market rolls, over or if this is an opportunity to buy the dip.
So far the selling has been contained and not nearly as dramatic as one would expect after the headlines we’ve seen. Unexpected strength is bullish even when accompanied by down-days. This is not to say selling cannot accelerate to the downside, but if the market finds a bottom and support on Friday, that means near-term selling has climaxed and the rally continues. A lot rides on tomorrow and it will give us greater insight into where the market is headed.
Buy the dip if we find support, but if the market continues sliding, let it find a floor first. The uptrend will resume, but we might see better prices first. If the market decisively regains 1500 tomorrow, then it will be a good buy signal, but if weakness continues, look for support at 1490 or 1475.
The surge of buying might be behind us and the correction has begun. If tops were obvious, we’d all be rich by now, so we just have to trade what the market gives us. The market probably still has more upside, but we are late in the move and smart money is locking in profits and waiting for the next trade. No reason to force a trade either long or short here and the best call could be sitting this one out.
AAPL is stuck under $460 and everyone should give up on the chances for a quick rebound after 6-days at these levels. In fact, we still might see new lows out of this stock as hopeful holders give up on the rebound. The best trade is stepping to the sidelines and waiting for the next tradable opportunity, either higher or lower from here. A break above $465 is buyable and under $450 is shortable, but take profits in these trades early and often because this is now a volatile trading stock and profits will disappear as quickly as you find them.