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Stockhaven’s Market Take 2/11/13

In a familiar scene, the indexes shrugged off morning weakness and eventually worked their way to the break even line, closing flat on the day. The VIX, at one point up 3% on the day, finished flat as well. In the most important development of the day as far I’m concerned, QQQ didn’t give up its gains from Friday. This in stark contrast to 1/24 & 2/4 when it closed below $67 after closing above $67.50 the previous day. This is good news for the bulls because the $67.50 area had marked the top of the channel that QQQ had been stuck in all 2013.

In an otherwise uneventful day, here is what caught my eye:

  • AAPL fills the gap — 12 days later, AAPL has finally filled the bottom of its post earnings gap down, trading above (but not closing) the $483.38 1/15 low
  • GLD in danger — GLD slipped back into the red for 2013 and is in danger of a breaking key price support at $158.89

AAPL has rallied 9% over the last week or so and today it traded above the 1/15 low of $483.38 that forms the low of the open gap. While that’s better for the bulls than not filling the gap at all, AAPL now looks somewhat tired. AAPL has seen declining daily volume in the last 2 days, a sign that demand is waning as the price is rising. While a tradable bottom is in on AAPL, volume is not confirming that THE bottom is in. If that is the case, you’ll see a 30+ million share day and $500 prints this week, otherwise I remain skeptical of this rally. Seeing as my $483 target hit today and volume is declining I believe you can start looking to short AAPL again in anticipation of downside on a failure to conquer the $485 price level.

From one high profile stock to high profile commodity, gold looks vulnerable here. However, this is not the first time GLD has looked poised to breakdown, much like it has looked like it may breakout earlier this year also. On a net basis, GLD has been in a sideways channel during 2013. Today though GLD closed at its 2nd lowest level of the year and the volume pattern is looking more and more bearish. GLD has shown a tendency to trade higher volume on down days than up days. GLD hasn’t closed back to back days below $160 all year nor has it closed back to back days above $162 since 1/22-1/23. If GLD closes below its year-to-date low of $158.89 I will have a bearish price target of $150 over the next 30-90 days.

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