S&P futures are up almost 10 handles as the three day bounce off Monday’s low continues. Apple (AAPL) is helping to fuel the gains after another very impressive quarter, with the stock up almost 10% in the premarket. The double bottom from Monday is the pattern that is still in control. I’m still not sure if the market is “out of the woods” as we will be testing some pretty significant resistance soon. If the bears have any control they won’t let the market negate the right shoulder that has been forming.
We continue to get bad news out of Europe as the news states that Britain is now in a double dip recession. Spain and Italy problems are still not solved, but markets trade and entries and exits are key. You must know your time frame.
S&P resistance stands at 1378-1382, a spot to take some longs off if you were looking for a bounce off the double bottom. The 1388-1392 zone is very big. A close above this and bears will have to really figure out their commitment to shorts. This is when the “roll up or not to roll up” game starts to get played. It might even start on the open if guys are trapped short from last night.
We are almost through the heart of earnings season. It’s been very stock specific, which is a good game for fundies and traders who know how to navigate.
Same way it might not be the most prudent to buy AAPL on this open at $615-620, it might not be the time to sell or short Baidu (BIDU) now that it’s down at $120-125.
Sometimes they grind the markets all day into the Fed News! Watch financials, they lead us off the lows Mondays. On Day three it might be a better time to take some profits vs. add to longs.
Disclosure: Scott Redler has no positions.