It has been a very choppy market even as the major indices try to hold higher. A ton of stocks are getting battered under the surface, and big name stocks that people thought were safe have taken it on the chin. (SBUX, CMG, COH, CAT, etc.) You really need to do your homework and uncover when the intermediate trends change.
Today, all eyes were on the ECB, and they decided to leave rates unchanged. Futures initially held up well after the announcement, but I don’t think the markets will get a pass today. The Fed did nothing yesterday, but that was expected. Data here hasn’t been a disaster. It’s been slower and a bit lack luster, but not a disaster like we have seen in Europe.
The indices are are at multi-month highs so hard for the Fed to act without a back lash. But Europe is a different story. I do think the ECB needs to take stern steps in order for this market to lift any further. Watch the key resistance at 1388-1392. Upper floor support held by a thread yesterday at 1374-1376. If the intermediate trend gets challenged at 1360-1364, and we see a close below 1348-1352, it will be a tough August for the Bulls.
You can hold positions in this tape with a hedge. Trade both directions.
Disclosure: Scott Redler is long AAPL, GOOG, LVS, WMBD, and YHOO and short SPY