Today saw more churning with the S&P500 spending time on both sides of the red and green aisle. By the end though, SPX pushed towards the top end of its recent range, closing at 1,414. The NASDAQ fared even better, but unlike SPX was unable to notch its highest daily close of the week (it also remained below the psychologically important 3,000 level). Even with today’s rally though, the indexes were still in negative territory for the week.
Here’s what caught my eye today:
- VIX finishes green — avoids back-to-back down days for first time since 11/6/12
- AAPL’s big reversal — finished off of its low of the day by 5.4% and up 1.5% on the day
- SPX gets jolly — highest close of the month so far a Santa Clause rally underway?
Volatility is still hanging around, leaving the door open for a good sized move in one direction or the other. What was interesting to me about today though is that the VIX went from red to green even as the markets were advancing. This tells me there isn’t a lot of trust behind any moves higher, especially as SPX has been unable to advance meaningfully past 1,420. Watch 16.20 on the low side in the VIX and 17 on the high side.
AAPL had a wild day today. The first 3 minutes of the day was very bearish for AAPL as it quickly sold off from $533 to $518 but that was all the bears had for the day. Literally within 5 minutes of the open a rip your face off rally was underway. AAPL rallied over 5% from it’s low before closing around $547. I stated yesterday that the market seems to think AAPL has bottomed based on how well SPY has been holding and after today that judgement by Mr. Market seems correct. I still have my doubt though, especially since AAPL finished below $550 (read more: Confused by AAPL’s move today? Let me help you out).
I don’t know if anyone noticed, but SPX actually finished at its best level of the week (and month). I’m not sure how meaningful this is though since we’re still below 1,420 and I’ve been expecting sideways action in this range anyway. Nonetheless, a close at highs is a close at highs, and that’s what we had today. Most encouraging for bulls was another successful defense of support above 1,400 as 1,405 was tested and held. We’ve had enough action this week now where I don’t feel as there is any need to go back and test 1,400.
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