I stated yesterday in my post that if we could have another day of tight, light volume consolidation we could see another move higher. We did not get that today, and I actually ended up shorting the market at the close. I did this because of these reasons - 
1. Expaning red volume
2. Outside day
3. $IWN sold off very swiftly today
4. QQQ's had an outside day
5. We are extended on the daily chart from last Friday and could chop around a little bit before going

I say all this not to convince you to short the market too, I am may very well be wrong. I am more over doing this to show and tell you my reasoning and what I see, this helps me and you. Go forward, I think we can see a little downward pullback action, and if all go according to plan, this pullback could be a buyable one. We need to form a higher low to confirm this though. I drew some key levels on the chart that includes my target  (right now) for this short. 

Apple had a nice day today despite the market selling off, it didn't have an outside day so that is a plus. Apple also traded on lower volume today, which seems good. Going forward, I would keep an eye on Apple and see if falls below today's lows. Apple is also a little extended on the daily chart after having such a strong week last week.

Google had a nice bullish engulfing day on decent volume. I would like to see Google to break the 8 EMA to have any continued momentum. I would not enter long now, it is at resistance and the volume today wasn't overall impressive.

Amazon formed a doji and slight outside day on lighter volume. Amazon is extremely extended on the daily chart and could pullback a little to get some more buyer interest. The doji represents some indecision on the market going forward. The volume is better sign though, the thing we like about that is that the major reversal usually come on high volume, this is not on high volume.

Going forward, I would still be careful and play only the strongest stocks but we have moved alot and could be due for a little bit of a pullback, which is a healthy action for the bulls. I am short and could be long in a couple days depending on the action. Overall the signs call for a pullback, not a downtrend bear market. 

And as always, look on my StockTwits/Twitter (@BenCBanks) for some charts of some of these stocks I mentioned plus more.

StockTwits - http://stocktwits.com/BenCBanks
Twitter - https://twitter.com/BenCBanks
12/10/2012 17:59:58

I never understand the logic/POV behind "all powers come to and end?"

What happened to real research instead of cherry picking a few misleading metrics.

What happened to knowing the products that Apple sells still have sustained growth for the next 5 years.

What happened to knowing that Apple already makes more profits then the almost all other media and consumer electronics combined and CONTINUE to grow those profits.

What happened to knowing that Apple has investment/cash that know one has ever seen in the history of the markets.

Yes, the stock is disconnected from the actually company at this time but its very, very foolish to assume that disconnect simply continues.

We all agree short term irrational stock price movement happens but at some point REAL FACTS take over.

This does not mean that price movement can not go much lower...again short term irrational markets happen.

My point is a simple one......there is not a valid metric that agrees with anyone thinking Apple's real world domination is coming to an end. Nadda, Nothing.....the $$$ profits, sales, retention rates are as strong as they have ever been.

Apple's 2013 profits alone could sustain Amazon profit growth for the next 10+ years ;)

Ben C Banks
12/11/2012 20:20:34

I replied to this comment here -- http://thebagelshop.weebly.com/5/post/2012/12/my-philosophy-on-trading-and-technicals.html


Leave a Reply.