Monday, April 23, 2012

Range Bound.

Apple sold off in the morning but bounced back later, to close with a tiny red. The interesting story of the day is that of SPX. At some point in the morning, SPX was down almost 1.5% but it pared back the loss.

What I find interesting is that we can consider it as test of previous lows which it did not break.  Now it should have a test of the previous highs, at least which is the theory. Only when that test fails and it reverses, we can short with confidence.

Tim Knights of SOH has this chart of /ES. ( SPX futures)

As you can see, /ES is moving in a range and today it touched the lower part of the range and bounced back.
Let us see what Apple and Bernanke bring the day after.

They say, sell in May and go away. But no where it is said that sell on 1st of May. Actually, 1st of May is bullish for stocks, DOW up 11 of the last 14.

I am still waiting on the side for confirmation of break of this range and failure of the test of the highs. As of now, the markets either gap up or gap down and mostly stay there for the rest of day. Not a good sign for retail.

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