The 10:00am better than expected ISM reading triggered another short squeeze, as shorts have been on the ropes since last Thursday. Market participants had some choices to make as SPY crossed above $139.30-$139.40 on April 26th. Since then, they’ve digested nicely above it.
Apple (AAPL) finally gave us our 80-20 trade as it traded below $583 down to $581.23, triggering a “Red Dog” reversal. The strategy was to buy back back through $583 with a stop at low of the day $581.23. That’s only $1.77 risk with a stock down from $618. AAPL is now $595ish with resistance at $596 then $598 starts a gap to $600.50.
Netflix (NFLX) nice “Red Dog” reversal from the Price point sheet, $79.67 was pivot.
Gold (GLD), be careful seems like strong numbers takes the GLD trade lower due to lowered expectations for QE3. The morning low is $161.17 uncommitted longs use that as a stop. Real stop is $160.80.
Disclosure: Scott Redler is long AAPL, MSFT, DNKN, GM, SLB, LNKD, GLD.