Stock Market Technical Analysis Blog
Click on image to enlarge
In the market today, we basically had a sideways day as most of the leadership stocks become exhausted. AAPL, however, was a different story. In the past month it has enjoyed a big run up in anticipation of inking a deal with China Mobile and the introduction of a really low price phone. When they pulled back the curtain at the event yesterday, smiling investors began puking as neither materialized. At the open today, AAPL was punished severely to the tune of a five percent drop.
Looking at the above chart of the S&P 500, I feel like it would be appropriate to bring attention to the fact that the S&P closed at 1688 which is exactly the number of the late May peak. If they can keep the market going higher tomorrow and break through that level then the rally is still in business but if it pulls back tomorrow the automated trading programs will start plotting 1688 as the top of a right shoulder of a huge head and shoulders top formation.
It wouldn't take much for the boys to make the needed adjustments higher in the S&P futures overnight to keep head and shoulders pattern alerts from popping up tomorrow. However, if they don't bump the S&P over that 1688 level then the path of least resistance will be downward. As early as tomorrow evening stock market news site technicians could be posting the above layout for discussion.
Hopefully we will hop right over that level and keep right on going but if we don't, a head and shoulders analysis will become a burden on the market.
Trade well my friends
Alan
