Yesterday with the Jewish holiday, the action was slow and volume was light, but we got a sizeable move to the upside with the DOW up almost 140 points. With three down days in a row last week on heavy volume, yesterday's action repaired some of the broken charts. The market is still trading at the top third of its trading range, but we may need to see more consolidation before conclusively taking a direction. It is important to look to get involved short at key resistance levels. 1065-1070 could pose a problem for the S&P500 and could be a good area to look to short. Notable stocks to watch are AAPL which still looks strong and is forming a nice base. The insurers are on everyone's radar and could bounce today as they are approaching key support areas. Gold has started to show some weakness for the first time in awhile, although we are still bullish over the long term. Defense and oil stocks have had shallow retracements and still look bullish. Overall the market may need more digestion, so stay flexible and patience until we start seeing better setups.
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