State of the Apple – 1/27/2010


Two major events today besides the FOMC announcement.  Apple introduces some tablet like computing device and President Obama delivers his State of the Union address.  Both events are being looked forward to.  


Hopefully the Apple announcement will inspire a vision of forward moving technology.  If Apple is able to define a new market, like the Ipod did, others will follow and technology needs a little inspiration now.   Hopefully the President will inspire us with leadership and re-instill in us believable change.  Small bites Mr. President. 


Around the World last night:




Nikkei and Hang Seng ended in the red.  Again the Hang Send tried to rally to green but failed mid-day.  The Nikkei was down all trading session





Currently the European majors are down in the -.5% again today.  They are rallying up from a weak open however so they are showing more strength than the numbers would suggest.


United States

Futures had been down but are now up slightly or breakeven.


Economic news this AM:




Today on the docket is more housing numbers which might actually meet showing an increase in sales.  We need to rid the inventory.  Watch the dollar react as Geithner is scheduled to speak around 10 am.  Weekly crude numbers at 10:30 and drum roll please… 2:15pm we will hear that inflation is low, the recovery is underway and interest rates will remain the same.


Earnings this AM:



Still a lot of minus signs in those year over year numbers, but the beats/miss ratio remains high.  Overall earnings are coming in strong.


Breadth Charts:


40 DMA % Index



The percentage of stocks trading above their 40 day moving averages is dropping quickly.  I pulled the chart back and you can see that we are still ok compared to previous pullbacks.  The October correction took us down to 20%.  The chart scores a -6 today.


10 day high – low:


Any reasonable strength today should get us out of the -6 score.   We still have not had that swoosh on this chart like we did back in October.  There is downward room left on this chart.


52 Week New Highs:



The 52 week new high charts scored neutral.  All three indices closed higher bars than the previous day.  Not spectacularly, but still progress.   When you are in a hole the first thing you have to do is stop digging and this chart has based and now needs to follow through today with added strength.   We had 75 new highs on Tuesday for the NYSE.  Today we would like to see close to 40 in the first 30 minutes.  That will require a decent opening.



The charts score a bearish -12 today.  The only neutral chart is the 52 Week new highs charts.   But you need to build somewhere.  It is still too early to enter long in my opinion as the all clear has not sounded. 




We continue to be perched on this precipice.  That 1090 area needs to hold for a close today or we could fall back to the 1070 area.


SPX chart



We make the SPX chart simple today.  The upper goal line has moved closer now that we have had two NR7 days in a row  as we are consolidating from the major move down.  As RV_Trader from our room pointed out last night, the bulls were able to make higher highs without making lower lows yesterday.  We have tested this 1090 area three times now.  The worrisome thing is however that price appears to be attracted to the 1090 area.  The bulls need to show rejection of that area today, push the prices above 1103 and close there today.  A nice simple goal for the bulls (about 10 points away however).   The bears just need to be bears and let gravity do its work here pulling the prices down below the 1090 area.  The 1086 area is a scary drop zone but maybe the bulls need to see the edge before they begin to fight back.  Prices below the 1086 area could accelerate to the downside.






Looking toward the ESH10 chart the bulls need to focus on higher highs so prices above 1100.  They also need to stay away from 1086 and not let the bears violate 1083.


Hope to see you in the Trading Room or in the markets;


Marlin aka:RedlionTrader

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