Once again I am looking at a potential market top forming. The S&P has entered price levels that could provide stronger resistance than what we have seen previously during this run-up to new highs. I like taking any opportunities to short this market right now (this is speculative given the fact there are no negative signs other than the market being overbought), the key is to do it cautiously.
Watching the S&P cash index ($SPX.X); Though I am preparing for the possibility of a market top now ($SPX.X closed last week at $1293), there is potential for it to move over 1300 and as high as 1312. If the S&P cash sees a daily close above 1310-1312, all shorts bets are off. This would be extremely bullish and would be a sign to abandon any shorts...
Levels to watch today on the ES:
Resistance above at 1290-1291, 1295
Support Below at 1283-1284, 1279, 1274-1275
Earnings watch: Apple and IBM after the close.
Apple is down 4.5% in pre-market on the news that Steve Jobs has taken a medical leave of absence. See if AAPL earnings can send the stock back towards $350. I think earnings will have to beat expectations to have any chance of this. Best to Steve Jobs...
Tuesday, January 18, 2011
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