Markets started strong in the first 10 minutes after the bell, but got hit hard the rest of the morning, filling the overnight gap. Stocks got hit with a double whammy from US economic data: poor PMI and then a lower than expected consumer confidence reading. The market has been ignoring problems in Europe and focusing on US data, and is prone to sell-offs with that data does not please investors. We saw the same thing last week with new home sales, a gap up and fade after weak data.
There are still some things to do in this market, though. The $131 level is the pivot to watch in the SPY, and under that there is yesterday’s low of $131.05
Apple (AAPL) stayed strong early, but succumbed to the pressure of the market. The intraday pattern is a little sloppy, but it held yesterday's high on the pull in.
Google (GOOG) triggered long with an open above Friday's high, but also came in with the market. I will continue to watch it.
Netflix (NFLX) had an exhaustion move yesterday. It gave us clues to short it below yesterday’s high of $123.99, and it went as low as $121.59. I have covered the rest of mine around $120 but it looks to be headed much lower. '
Banks are hanging tough, especially Goldman Sachs (GS) which briefly spiked through Friday's high.
Sears (SHLD), another reversal we highlighted and traded last week, continues to head sharply lower. I'm out of the trade, but it's interesting to note what some of these reversals can lead to.
*DISCLOSURES: Scott Redler is long SPY, OIH, LULU, WMT, REE, QCOM calls, DNDN calls, VXX Short DIA.
