July 21, 2008
Let’s be honest – it would have been more exciting watching grass grow than to sit in front of a computer and watch today’s market action. Traders used the bullish open to fade it to the downside and from thereafter the market traded sideways for the remainder of the session. The real action didn’t begin until after the market closed and Apple reported descent earnings but didn’t meet the Street’s approval. After hours Apple (AAPL) is down over 10% and unless the market rallies off of the cheapened shares, I expect that we could see a pretty dismal day tomorrow. Most were expecting Apple to blow away estimates as they usually do and the fact that they didn’t meet those expectations will likely put some jitters in the market.
The markets are as overbought as they have been in quite some time and the volume from the past two trading sessions have shown that the buyers are losing momentum by the decreasing volume power. We are also hitting heavy overhead resistance in the S&P (which we are short in) and with the Apple earnings report we should see a solid sell-off tomorrow.
Here’s the NASDAQ and S&P Charts…