Market pulls back a little
After harking shorts for nearly two months major indexes are showing relative weakness to the downside and pulling back. This was an expected move from every corner including the bullish traders who expected a pullback for some time. The market just cannot sustain that kind of rises. The rise in market making new highs every day has been frustrating to some. However this all looks very orderly at this point. Looking out next week is a bearish to neutral trading. What may happen here that SPX may touch it’s 50 day MA at 1775 levels weeding through the congestion on the left and may rebound. Any breaks below the 50 day will lead to the rising trendline as a next stop.
Next week we have Fed meeting on Wednesday and the expectaion are that Feds will do more or less the same. They will leave the tapering alone for now, as the employment situation is still improving. Feds are also looking at the job reports which are getting healthy every month. A break below the 7% unemployment rate down to 6.8 or 6.9 will triggger more euphoric conditions in the markets and more upside in the indexes.
Major stocks like GOOG, CMG, AAPL are pulling back with healthy profit taking and may give us a chance for long set ups this week. GOOG is near the lower trendline in this nice channel and look for some long trades right in that area. AAPL may go lower and towards 544 its 21 day moving average. That will be an area to watch.
This pullback is healthy and may prove better for for long set ups. It may not give you much time as the market can rebound quickly and the opportunity can vanish. The long term trend is still up in the market, unless proven otherwise by the charts.