Overbought Market Could Take a Dip

 

 

 

Overbought Market Could Take a Dip

via T3Live Blog by Scott Redler on 7/14/10

By: Scott Redler

From 1010 to about 1099, that's 90 handles in a pretty short time period. Lots of stocks had nice calculated moves, and some can continue, but next few days can be tricky. Earnings so far are doing better than thought, so this move can be supported. But no reason why S&P can't trade down to 1075-1080 first. It doesn't have to, but the first lukewarm report may trigger some profit taking. I've been long stocks and tried to be short SPY last two days as the move has been large. I never try and get all the juice, just the meat and potatoes.

TECH
AAPL got hit hard yesterday on iPhone concerns yesterday. It's down $3 this morning, see how it handles yesterday's low.
AMZN squeezed me hard yesterday. I will try a short again today for a day trade.
SNDK was a nice quick short yesterday on the AAPL news, today could be tricky, watch how AAPL trades.
VMW acts great near hold highs. No set up here until earnings.
BIDU also acts well
GOOG big bounce back to almost 500. I would take some profits if you can.
RIMM nice oversold bounce back into earnings gap, stock got a push up with AAPL weakness.

BANKS were the trade yesterday, most broke downtrend.
GS was great long at 138.50. Sold some around 140 and it should continue to 144-145.
JPM last time I sent it was 37.50 now it's 40+ hard to buy now. Could rest before numbers tomorrow.
BAC nice snap back to almost 16. I can't buy here.

CASINOS gave us nice trades.
LVS triggered through my 23.70 price and now could see 24.50-25.
MGM sent out note around 9.20-9.40 it's now at my quick target of 10.50-10.70. I sold some.

AIG triggered yesterday. Sent out note to buy around 36.50, yesterday it went to 38. Still has some room.

CNAM hearing quarter will be good, and stock is misunderstood. I bought some and will buy more if it trades through 3.30-3.40 with volume.

BP was a great short yesterday and could see more downside to the 35.50 area.

THIS IS A VERY TRICKY TIME NOW, MARKET IS VERY OVERBOUGHT. But it doesn't HAVE to do anything. Stay calculated, and not stubborn.

I am in Tier two short the market though, and if they push us early towards 111 in the SPY I will add more for a cost average trade but this could be painful. This potent up move- typically leads to another eventually, but I think as traders this is an area to get a nice short if done right.