Dow and S&P futures had a quiet night, while the NASDAQ 100 cracked under the weight of Apple which is down over 4% overnight. I've long been a fan of the company, but it has amazed me how fast Tim Cook has prostituted innovation in exchange for financial engineering. And from what I heard of the big presentation yesterday, the financial engineering was pretty weak. A cheaper plastic iPhone reeks of desperation. Evidently investors agree for the time being.
AAPL is at a delicate juncture. It bounced off a monthly 50% Fibonacci level and has stalled at a 38% Fib retracement level. So far it's a stalemate. But it's not inspiring much confidence. Technically, it's in no-man's land. Patience will be needed until the market tips its hand.
Ditto for the S&P. It's not inspiring much confidence for me as it rockets higher, but higher it goes. Yesterday had a whiff of euphoria. Syria was "solved" and Apple released a new product. Neither was a reason to buy for the long term. There could even be negative fallout from both.
The point is that for whatever reason, the S&P got into the price area of the gap and failed to fill it. It is likely catching its breath for a final poke higher, but it shouldn't have to catch its breath. It couldn't rally another 1.3 points? I'm seeing this more and more lately.
The 78.6% Fib retracement is 1690.27, just above the 1685.39 gap. I still see this area getting tested. Today could be a small pullback -- a rest day -- before doing so. Below 1664.83 would be an early warning that something more than fatigue has set in.
What if the market rests for a few days and pulls back but can't break 1627.47? Then perhaps a larger triangle or rising wedge is forming that may make a new high. Drawing a simple trend line from the May high through the August high targets roughly 1722. Another viable option that must be considered but not yet counted on.
No comments:
Post a Comment