With the market reaching an all time yesterday we said it was likely we would see some more continuation or a rest day today. Well, we saw neither, but closer to the later. Sometimes things just do not go according to the plan and currently $SPY has had a potent engulfing day AKA Day #1. Day #1’s are not days to be buyers of until they show strength again. Maybe after 2-3 days down we see a knee jerk rally like we have seen the past few weeks or maybe this is the top (NO I am NOT calling a top, I am simply using this as a way to convey my point of we do not know where the “day #1 will lead to).
$SPY could do nothing and we trade higher tomorrow and then make all time highs on Friday, or we could be in for another wishy washy month and a lot of chop. There was never a solid entry at the top of the range in $SPY as we never did “hold higher” but even if you did choose to buy yesterday (not a horrible plan), you would have likely been stopped out at the break of yesterday’s lows.
We now enter into a time where we do not know what will come next, what we do know and we will do is this: Look for when the marker begins to show life again (maybe tomorrow) and the look for the relatively strong stocks to buy (changes almost every time).
Apple ($AAPL) Again showed some strength today. It would be very good if it is able to hold above the key 50 SMA level for the next few sessions.
Google ($GOOG) also showed some nice relative strength today and could be in for a another trade higher in the coming days IF the overall market holds in place. Needs to hold the 8 EMA.
Amazon ($AMZN) is no good. I do not like the action that is taking place in it, as we talked about last week.. There has been a composure change in it and no longer is it a trending stock – needs time to base out again.
Banks ($XLF or $FAS) are very similar to the $SPY. They need to hold Today’s lows to keep the micro momentum up. If not, well we could see a deeper correction (not that it has been bad all year).
$GMCR showed a lot of strength today and could be on the radar if the market holds up for a move over the wedge resistance.
$NFLX is still consolidating, needs more time but not out of the game by any means.
So that’s where we are. If you have any questions/comments feel free to shoot me a Tweet (@BENCBANKS) or EMAIL (via the Contact Me page here).