Wednesday, January 10, 2007

Another AAPL Day

Market Action:
The Asian contagion we mentioned last night (not to be confused with the Italian Stallion) only affected the opening of our stock market on Wednesday.  The broader indexes were down in sympathy with the Asian and then the European markets.  Our markets still had an AAPL in hand and techs managed a big rally out of a dismal opening as AAPL was up almost another 5%.

There is really not much to say about the trading day except the bulls definitely won the day with all of the major indexes we follow ending up on the day on the out performance of the tech stocks led by none other than AAPL, again.  There were some areas of weakness early but the techs saved the day.  

As you know we have thought the market would give us a spike in early January, which happens to be right where we are.  We thought the Dow had done its spike on the first trading day of the year making new highs at that time but couldn’t hold them going into the close that day.  We are much less enthused about the tech stock rally as it is coming now, a week later than the Dow’s spike high.  

The NDX and the COMP have shown surprising strength here the last week and both are threatening to beat their late 2006 highs.  The pattern is one of a terminating move in our opinion.  We see the pattern finishing up here in the next week or so and we are going to be adding to our positions in that time frame.  We have left some powder dry and we need to find a nice opportunity to enter the short side in this rally.

Be careful out there—sell into these rallies.  

Dow Industrials:  12,442.16  +25.56
VIX: 11.47
HUI:  309.28
QQQQ:  44.62  (big day)
RYVNX:   16.14
RYAIX:  20.87
RYCWX:  35.57
TLT:  88.97
BEGBX:  13.53

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