Futures are pointing to a significantly lower open this morning, so far. S&P futures dropped fairly large in the overnight hours and they are still near the overnight lows, currently sitting at 1387.
With the holiday weekend upon us, we may be seeing a "sell and go away" situation unfolding on us today. With the economy faltering almost by the minute anymore with crude oil having reached the tipping point, the impact to the consumers won’t take long to be realized. The nation was already entering into a recession even before this recent oil increase. This just adds further to the depth of the recession that is descending on the United States.
Apple had some upgrades this morning, but I’m not changing my short position as I see the rapid decline in the consumer spending outpacing the long term picture for Apple. If it were a healthy bull market, then I would have taken my short off the table. But, in this declining economy I’m comfortable keeping my Apple short intact. The upgrades just means that the next down leg in Apple will take a little longer. My thesis on Apple is that their expensive products will not be able to meet expectations in this rapidly deteriorating economy.
Keep an eye on MKSI for a short entry today if the price drops to $23.25. See the chart in yesterday’s post.
7 Comments
May 23rd, 2008 at 9:42 am
Hey Chuck, I took a good look at AAPl just now and it looks like it could rally back to $192.00. The daily MACD will probably start to rise if it closes up today. But overall your thesis is correct, AAPL will sell off. It just might take a little longer. It seems that they are trying to suck in more chumps during a light trading day so they can bang em latter next week. The key is that the weekly MACD is starting to fall and that overides short term daily action.
May 23rd, 2008 at 10:57 am
The sp500 goes to 1340 - 1320. This is the critical level that you have to watch. See my chart.
May 23rd, 2008 at 11:03 am
The XLE is starting to sell off. This could add more pressure to the S&P.
May 23rd, 2008 at 11:04 am
thanks for the chart, Steve VIX…..
May 23rd, 2008 at 11:25 am
Steve VIX,
I agree with the 1320 range on the S&P. I expect that support level to be a temporary reversal point. I still see the S&P going much lower in the long term however.
May 23rd, 2008 at 11:30 am
The reversal will be short, the next leg down will break bones. It will be very very strong. I receive strong signals, sorry that i cannot publish them all.
May 23rd, 2008 at 12:05 pm
Break bones? Ouch! I agree, too, Steve. Thanks for all your input.