Ouchie. That’s the best word we can think of to describe the pain any market must be feeling after today. Making matters worse is that oil led the market lower, closing at its lowest level since October and suggesting the market has more downside in store. Why can we make this assumption? Because on numerous occasions over the last few years, oil has bottomed before the market. Based on that assumption, because oil broke to new lows today, the S&P500 will break to new lows sometime in the near future as well.
While the broader market picture is cloudy, we saw another very important stock shine bright: AAPL. AAPL closed at its highest level since the beginning of the month today. The stock has now closed higher 5 out of the last 8 trading days, you’d have to go back to late March to find the last time the stock did that. Due to AAPL’s importance as a leader in technology, its recent performance is encouraging. The $560-$565 range is where we’d like to see AAPL establish support on any pullbacks moving forward to confirm this most recent trend.
Fortunately for anyone short the market, stocks like CMG & AAPL finding their footing aren’t going to do much standing in the way of tumbling oil prices or a soaring VIX. Oil flirted with key support at $87.50 today and judging by how quickly it was able to hit that level (after falling below $90), it looks as if it wants to move lower. $85 would be the next possible destination for oil. The good news is that this shellacking oil has taken the last month will likely make it harder for disappointed data (like maybe this Friday’s jobs report) to drive the price lower.
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- SH @ the close 10/17/2011: Markets sink as financials takes a dive; VIX soars
- Further evidence of AAPL’s leadership role
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