At this point it seems like the market is trying to grapple with Apple's (NASDAQ:AAPL) weakness. AAPL and the broader market are having a bit of an identity crisis recently. The S&P is doing work over the 200-day moving average above the 1400 level, but it does seem a bit hard to trust right here.
Recent support is 1397-1403 and recent resistance is 1419. It sees like the normal rules don’t apply to the market right now as we are seeing many divergences amongst stocks in each group, let alone sector vs. sector, so I’m trying to keep it light.
Banks had a really nice move yesterday and should be on the radar. If they remain strong it would really help the market hold it together. Bank of America (NYSE:BAC) was the standout as we have been stalking a trade above the $10 level. The stock finally broke out yesterday and finished up more than 5%.
Some industrials also had some money rotate in. Tech remains a mixed bag.
For AAPL we can use the $538.77 level as a pivot, but I would be careful as it’s within a gap that gets closed around $530. I will be trading a level vs. a level based on priced action, but will not get married to any trade with AAPL. Recently the stock has been dangerous and surprising, but it moves and there is money to be made if you’re on the right side.
I talk more about the new psychology of AAPL here in this Wall Street Journal article:
http://blogs.wsj.com/marketbeat/2012/12/05/apples-halo-cracked/
Precious metals remain choppy to the downside and hard to trade.
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*DISCLOSURES: Scott Redler is long BAC, JPM, CAT. Short SPY.
