The market had its worst day of 2012, with both the Dow and S&P sliding 0.69%. Yesterday it appeared Greece had finalized an austerity package that would pave the way for a second bailout package, but the deal continues to scuppered by procedural issues. Greek politicians, unwilling to have their name attached such wildly unpopular measures, are stepping aside and creating turmoil within the government. If a deal cannot get finalized this weekend, it is likely we will see more downside in this market.
While the market did drop today, it held all the key technical levels and kept bullish composure intact for now. The S&P threatened the five-day floor, but never broke below. Yesterday we saw the VIX index spike up at the end of the day despite the market sitting tight, which perhaps suggested skepticism that Greek deal would get done overnight. Today we saw the VIX continue to rise despite the market holding in, but that changed in the last hour when the VIX staged a nasty reversal. Perhaps that is a signal of resurgent optimism about a Greek deal getting done.
The highlight of the week was undoubtedly Apple (AAPL), which gained 7%. That type of percentage increase is even more impressive considering it was already the most valuable company in the world. Excitement over the new and improved iPad 3, expected to be released as early as March, as well as continued digestion of the company's stellar earnings report have investors clamoring for shares of the stock. AAPL is knocking on the door of the psychological $500 level.
*DISCLOSURES: Scott Redler is long VXX, SPY, AAPL, TBT, QCOM, VMW, LULU, OIH, HAS, WMT. Short QQQ, DIA.
