Tuesday, August 23, 2011
Do the bounce, the Bernanke bounce
Market action today was very positive. The bulls showed a little more fight today with steady buying pressure throughout the day. Markets ended 3% up and Gold was 3% down. I was very encouraged by today's action and may put on some longs tomorrow. I am looking at AAPL specifically and perhaps XLE. The fact that oil held up even with the Libya news is bullish to me.
Looking at the charts, markets may have put in a double bottom and if my rudimentary TA is correct we could be looking at a target of 1280-1300 on the SNP. I did not do anything today with my portfolio as it seems I do not have a handle on the short term direction of the market at this time. Yesterday I was talking about shorting small caps and buying gold and both of those trades got obliterated today. Gold had a huge reversal and a nice dip buying opportunity could be coming up here. I still like AAPL also and in a better market it would be north of 400 bucks by now. AAPL is one of the cheapest high growth stocks out there and should be trading much higher in my opinion. I think people are afraid to buy it up here because it's market cap is so high, but I think it will become the first 500 billion dollar company. I have gotten burned by headfakes in the market the past few weeks but today's action seemed very real to me and we could get a nice rally from here. Let's see what happens...
Disclosure: Long NLY
double bottom- A charting pattern used in technical analysis. It describes the drop of a stock (or index), a rebound, another drop to the same (or similar) level as the original drop, and finally another rebound.