The markets got clobbered today with the S&P 500 down some 2% and small caps down even more than that. Guess what? Every dip since the March 2009 lows have been a great buying opportunity. Is this the dip that doesn't get bought? Are we on the precipice of a major market reversal? Is the trend now heading the other direction?
After today’s market sell-off, the VIX rose a mammoth 35% and the VXX rose 10%. Two major global issues occurred today. The Malaysian Airline plane that was shot down, killing all on board, worried traders. In addition, Israel began a ground attack on Gaza. All of this led to the S&P 500 having its first down 1% in over 60 trading days and has given us another geopolitical crisis. What now?
Equity markets around the globe sold off today after the Yen strengthened sending the Nikkei down dramatically after comments from Japanese officials scared investors. We witnessed the same thing last week only to endure a remarkable recovery into the end of the week. Was the recovery nothing but a sell-able bounce? Are stocks poised for a big decline heading into the summer?
Two Fridays ago a late day swoon brought the bears out of hibernation. The Hindenburg Omen! Dirigible debris filled the sky. The end was near, sell everything and head for the hills! The bull market is over..... yet stocks closed the week higher. Go figure.
We find ourselves this week in a similar position. The bears are out of their caves, the fear is palpable, stocks are vulnerable, yet I think we have a good chance to close the week higher than we started. I'm not sure there are many people saying the same thing.
Below are a few charts for $AAPL, $GOOG, and $SPY. These chart are my opinion only as are where I think the market and these stocks are headed.
Based upon the last 9 months of trade for $GOOG I think 3 scenarios are possible but feel the most likely scenario is a move over $900. Late last week I told the chat room that I thought $GOOG was starting to curl after a long consolidation. That curl upward should lead to new all time highs. I don't think it happens this week but it will happen within the next few.
$AAPL remains well positioned for a move to $500, its just a matter of when. A few months ago I said the same thing about $BIDU with the stock at $84 a share, saying $100+ was coming. It took a little longer than I thought it would, but it came just the same. $AAPL the only question, in my mind, is when this move will occur. The bottom for the year was hit in April. I think this will hold. Right now we are looking at a very nice inverted head and shoulders and this will resolve 20% to the upside.
$SPY in my view has also bottomed for the time being. We are looking at a possible inverted head and shoulders. This should resolve with higher prices. I think $166+ on the $SPY could be hit this week going exactly against what everyone else thinks will happen and putting the few remaining bears out to bed again. Good night.
Finally, if someone put a gun to my head and asked where these stocks will close the week, I would calmly answer: $SPY $165.20, $GOOG 905, and $AAPL $450.