Talk about momentum, the Dow Jones again recorded a record today and the S&P500 inched ever closer. What’s more, this is the second Monday in a row where SPY closed green after not closing a single Monday in the green until last week. Last Monday ended up being the lowest we saw SPY all week, and in a low volatility environment I wouldn’t be surprised to see the same scenario play out.
- No quit in market — New all time highs for the S&P500 seem like destiny at this point
- VIX 11.50′s — Welcome to the lowest levels in the VIX since April 2007
- AAPL gets going — AAPL has traders wondering if the bottom is finally in?
The markets started out slightly lower as they appeared to be in “digest mode,” the term I use in place of consolidation at times after a big move. After you eat a big meal you are full for a while, but you always end up hungry again. The initial weakness this morning was the market digesting that big meal from last week, but by 11:00 it was ready for some dessert as SPY starting gearing towards Friday’s highs.
Today marks the 7th up day in a row for SPY, and with Tuesdays having been green every time since January 8th, the odds of another green day tomorrow are higher than they’d usually be. In the event of weakness at tomorrow’s outset, watch for the market to show you its hand. What I mean by that is if 1,550 can’t get taken out I would consider that a pretty heartless attempt by the bears to move this market lower and assume they’re waiting for a better shot… say above all time highs.
If the VIX had a mom she’d probably be asking her son who keeps beating you up at school? Since falling below 15 again on March 4th, the VIX has fallen 23%, ushering in the all time high/multiple year highs you’ve been seeing in the indexes. I believe we’re entering a new near term range in the VIX where 10-11 marks the lows, and 13-14 marks the highs. While I don’t have an exact time frame for how long I expect this new range to play out, I feel confident in saying I expect to remain within it for the remainder of this month.
Coming into today I said AAPL could rally to 440-450 this week, but my main caveat was that that move had to start by today in order for it to play out. Well, after staying below $430 all day, AAPL ran wild around 1:30 from $428 to $438, before closing right around $437.50. I feel kind of conflicted about this move. On the one hand, AAPL is meeting the bullish criteria I said it needed to, that is a $435 breakout today, but on the other it only closed $2 above that key level.
As a result of these mixed emotions about the move today, I have new criteria and its pretty simple:
- AAPL needs to close above $441 on a 15 min closing basis within the first 30 minutes tomorrow if $450 is in play, otherwise I will bet it closes the week in the $420′s or even lower.
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