Stock Market: Today Could Conceivably Be An Inflection Point

There are occasional days in the market when we do our set-ups that we sense volatility. Today is one of those.

We have been watching the sell-off of the high volume, high-beta, high-tech stocks (Research In Motion (RIMM), Apple (AAPL), Amazon (AMZN), Baidu (BIDU) and Qualcomm (QCOM)) into the broad market strength on Friday and again yesterday, which we noted in today’s Daily Report.

Just in case you miss that DR, here are some points of interest for Fed Day:

-use simple trend lines on the four horsemen (AAPL, RIMM, GOOG, and AMZN) to identify short-term support, respecting trend line breaks on volume.

-S&P (^GSPC) 875 is a widely recognized resistance level. Taking out this area would attract buyers, so monitor volume, but be wary of a quick reversal back into the congestion area subsequent to any breakout should that occur.

-as long as iShares Barclays 20-Year Treasury Bond ETF (TLT) stays under 100, the prospects for higher US interest rates increase, a major problem for a nation addicted to borrowing, and massively in debt.

-SPDR Gold Trust ETF (GLD) needs to hold 84, breaking above 92 bullish. Use shorter term 5- and 15-minute charts in gold stocks, with an 8- and 20-period EMA to fine tune entries and trail stops.

-an escalation of tension in Pakistan or a successful offensive by Taliban forces destabilizing the region supports higher gold prices.

-Euro is very strong overnight, with money moving into commodities and precious metals.

-news reports indicating a spread of the swine flu pandemic will put pressure on equity markets, as most participants expect minimal economic disruption, meaning this outcome has NOT been discounted by investors.

-Hong Kong, China and India rallied hard overnight, largely on speculation that a pandemic is unlikely. That could change.

-Europe is looking a tad stronger as money is moving into banks and miners, but not so much into tech.

Today could conceivably be an inflection point: Be prepared ahead of time.

Have a great day trading.

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