We are not out of the woods yet, we have bounced today which was likely given how extended we yesterday. I think a hold below 156 early next week and we are likely going to be heading lower. However, if we breakout above 156 and then hold higher early next week the correction is likely to be over.
These are the two scenarios that could play out. We still need to keep an open mind because the overall trend is still up but the signs of weakness cannot be ignored. Every other time we have pulled back it has not led to anything. Maybe it won’t this time either but we (as traders) cannot think like that, we need to think objectively and look at what we have now and what the POTENTIAL scenarios are. Personally though I believe we are likely to hold below the 156 level and then trade lower next week. We shall see though, no positions right now.
Amazon ($AMZN) is really not showing any strength like it was late last week and early this week. That is fine, it was a potential trade that never went anywhere.
Apple ($AAPL) is not done going down, I am just going to say it how it is now. It is no bueno.
Google ($GOOG) needs to hold above the 790 level to keep momentum on it’s side. If it can do that I would have to expect a trade through the 50 SMA.
Banks ($GS $BAC $JPM $XLF) are still showing weakness and I do not like what they are doing here. Ideally you would like to see them take the lead on the next market rally.
I will do my Week Ahead post as always that will come out on Sunday evening and have 2 videos and about 20 annotated charts. I would recommend coming back for that as it can really give you a feel for the week ahead.
If you would like to contact me please use Twitter (@BenCBanks) or StockTwits (@BenCBanks) or the Contact Me page on this site. Have a good weekend.