“Willingness and ability to hold funds uninvested while awaiting real opportunities is a key to success in the battle for investment survival.” -Gerald Loeb
The U.S. market continued sell-off Wednesday since last Friday’s bearish reversal session on NFP report. The S&P 500 and Nasdaq have both extended their losing streak for four days in-a-row, while the Dow has stretched its losing streak to three straight sessions. SPX at 1432.56 now is near its 50-day moving average.
Earning warnings or poor guidance from various companies keep putting pressure on many stocks and the broad market, such as AA, CMI, CVX, EW, TSO, ZNGA, etc. October usually is a tricky month, especially after the four-month rally since June 4th bottom. Correction is usually expected.
To me, AAPL’s multi-day sell-off since its bearish reversal action on 9-21 has been foretelling what was going to happen to the broad market. However, as of yesterday, AAPL seems to have had a capitulation sell off on massive volume after hitting its intraday low of $623.54 or 11.55% off its year high at $705. I, along with many traders, got lucky to have participated in trading such a risk-and-reward oversold bounce yesterday. Due to the weakness of broad market, I got out of my AAPL long position.
GOOG also has been sold off nearly 4% from its year high 775 hit last Friday after a SELL signal mentioned in my last post. MA, another strong leader, reversed down as well after it hit all time high last Friday.
But, today I saw something interesting happened!
FDX, an economy telling stock, bounced up $4.41 to 89.99 or up 5.15% despite its warning many days ago; AAPL stabilized after the brutal sell off for over two weeks; COST, WMT, GNC, YUM, WMT all acted strongly, near or hit their year highs. Financial leaders GS and JPM are still holding up near recent highs. All these signs mentioned seem like silver linings to me. Pushing a SHORT button can be really dangerous here. Additionally, the oscillator is now at minus 47, near an oversold territory.
During the tricky time like this, it’s smart to sit tight with capital available for proper time to get in while watching how market price action will be developed. Always be observant, flexible, and objective!
Here is the AAPL intraday chart with my notes:
Thanks for viewing, and trade safe and well!