Market did the unthinkable yesterday, it rallied without AAPL and generally did it with a level of confidence, after a shaky start, on the usual concerns about a Greek bailout…..
The SPX made a move above 1276 in the late morning and basically stayed above that level right into the close. The fact that the S&P is doing this in spite of last weeks test and hold of its 200 day moving average (below) is fairly encouraging, especially when you consider the Nasdaq tested and broke below (2nd chart) and closed below its 2oo day, but is barely holding at key support[caption id="attachment_2806" align="aligncenter" width="300" caption="1 Yr SPX chart Provided by Bloomberg"][/caption] [/caption]
The SOX under-performance remains glaring in tech and numbers are starting to come down in names like MU…..will be interesting to see if we get any pre-announcements as we head into quarter end in this space as PC’s could be soft and NOK and RIMM have already told us that handset sales aren’t rosey for all. QCOM could be vulnerable, in my opinion, because they are the sort of company that tells the Street what they want to hear until they just can’t keep the act up anymore…….the stock is down almost 9% since the May 2nd high but still up 8% ytd…..
The banks continue to stink and are hovering within a couple percent of their recent lows…..these stocks need to put in a bottom for a sustained rally to occur in the broader market….I know that sentiment is starting to sound like consensus, but I have been saying it for a while and I am going to stick to my guns….I am still long JPM July Put Spreads as I think the estimate cuts that we saw in MS and GS yesterday could be the thing that will finally discount poor earnings and possibly help these stocks lift on the way out, as expectations have gotten to low…..
EYES ARE ON THE FED AGAIN as the FOMC will release its rate decision tomorrow afternoon and as usual, but maybe more important now than ever, the chairman’s words will be parsed for any change or hint to extension of their easy money policies……markets clearly look set up for a little short covering rally especially when you consider the confidence vote in Greece this evening…….markets hate uncertainty and at this point, after the past month’s weakness, some may feel that the near-term risk is to the upside……
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