Key Observations (April 22, 2009)

The S&P 500 index is holding up well despite some selling in Financials, Health Care and Mining Sector.
It is all too clear that some money is moving into Aerospace and Defense and Industrials...and that should hold up the index for the time being.
Some profit taking in foreign markets (Canada, Brazil, Russia, China) were also noticeable.

One key stock that I have been watching is AAPL, I think it is holding up very well and am neither bullish nor bearish on this stock at the moment.
The chart of AAPL has a big gap to fill and this is caused by about 3,850,550 shares at an average price of 250 dollars per share = 962,637,500 Dollars (close to 1 billion dollars)

I see two possibilities for this type of move:
1. Funds are finding a place to hide due to worries that the FED might hike rates in the coming FOMC meeting.
2. Investors/Funds could be thinking that they bought AAPL shares cheap and are hoping to sell the shares to as many buyers as they can. In my opionion, that will most likely not work....and will present a shorting opportunity similar to POT. We shall see.

Moving forward, I see short term strength in Small Caps especially Regional Banks, REITS and selected Consumer Staples.
On the Metals and Fertilizers, I see weakness at the moment...just waiting for strength to develop for some trend trading.

I am also watching UTX, VMW, NFLX to see if there is any follow through of this uptrend. It seems that there is also a lot of call buying in TZA...this could be a very bullish or bearish indicator.....also watching the Russell for any suprises

Base Metal Hurdles

As you might have noticed, there has been some profit taking in metal names like MTL, X, AKS for the past two days.

I usually refer to the DBB to see what is going on in the underlying. The chart shows that DBB is retreating a little with the descending trend line acting as a hurdle to overcome for now.

SPX, RUT in focus

Here we are again, facing another key resistance level on SPX and RUT. I don't want to look at the Dow at the moment because it has the least components.

On the SPX, we know that breaking above 1177 - 1180 decisively could bring us to 1191.16. The key resistance after that is 1200.23. So let us worry about these levels for now.



On the RUT, what surprised me is the ability of the market to break through 647 - 675 with relative ease. At the moment 693 is the key resistance level to watch. The chart looks ugly for the region between 693 to 718.53. It looks to me that this the most likely index to pullback first...
Any attempts to reach 718.53 could look more like a grind up.

Pivot Points

Wrong Opening Price

Performance comparison of 3X ETFs