SPY weakly gapped higher today and was below where it opened (142.80) within 10 minutes of the trading day. A steady downtrend in SPY moved things lower throughout the day. Cliff negotiations continue to be the most cited reason for market volatility. The VIX closed at a 2 week high (16.64). AAPL did something today it hasn’t done since it dropped 27%. Here’s what I’m watching for tomorrow…
- SPX 1,400 — no reason to go below 1,400 here if we’re gonna rally into year end. Below 1,400 and VIX > 17 could see a move into 1,380′s
- AAPL range — For 3 days in a row, AAPL’s daily range hasn’t exceeded $10, the last time that happened was the week of its all time high
- Fiscal cliff chatter
I get the sense traders feel like the market wants to make a big move here. I don’t necessarily see that happening though. At 1,409 SPX is at an area that it consolidated around last time it was here. Look back in August before the move up to new highs, SPX traded between 1,394ish-1,416ish. That is in line with what has been the general range for 7 trading days now.
Seems like a decent amount of the fiscal cliff chatter at this stage is priced into stocks, that’s what the last 19 days were all about. You either think they’ll get a deal or they won’t, but the market seems to be thinking they will. So until the rhetoric starts getting intoxicating I expect there to be strong support around 1,400.
Should 1,400 fall though I’d look for AAPL to lead the way. AAPL short term chart looks like it has a lot more resistance levels than support with a $580 breakdown paving the way for a possible $560′s revisit. Otherwise though, don’t be surprised if we keep bouncing around between 1,400-1,420. Along with that, AAPL may keep channeling between $580-$590ish
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