Apple Keeps a Lid on the Bulls

 | Jan 23, 2013 | 7:00 AM EST
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On Tuesday, someone asked me why I thought we weren't seeing giddiness in the market -- and the only reason I can come up with is Apple (AAPL), which just hasn't been able to get up off the mat. Poor Apple -- it went from the stock to own to one that's shunned.

I still think the "bear-taunting" is present -- and, in fact, it was significantly louder Tuesday. I expect that, if Apple can play beat-the-number in its earnings report, folks might take that as the "all-clear" to get highly bullish. Ahead of earnings, I don't have a strong view here. If the shares had already been trading above $510, I'd be more inclined to like it. However, it's sitting right in the $500 zone, so I can see it up big or down.

Away from that, let's take a look at Google (GOOG), which got everyone so excited after hours. The stock has spent the last week or so pushing lower by just over $40 -- and, after hours Tuesday, it was up $30, so it's essentially reclaiming what it lost. What I will watch for now is whether it can make a higher high. If it cannot, then I'd say there's a possibility this rally may become the right shoulder of a head-and-shoulders top.

Google (GOOG)

I was asked about the chart of the S&P 400 mid-cap index, which I had liked back in December, when it broke out above 1000. There is a measured target on this chart around 1080 to 1090 -- so with its Tuesday close at just over 1080, the price is getting into its target zone. It hasn't done a thing wrong, but once a target zone is reached, the next step is typically either sideways or down. I'd be a profit-taker now.

S&P 400

Finally, I was asked about the dollar-yen currency pair. We discussed the chart of the euro-yen cross just over a week ago, and I noted it had a target of between 120 and 122. It has since struggled to get above 120.

The dollar-yen cross, meanwhile, is sitting right on an uptrend line that I am certain every currency trader has their eye on. If it breaks that line, I think we'll see a quick move under $88, followed by a snapback rally that would then fail at the underside of the line. But I believe a break of that line would get folks' attention. The dollar-yen has been on a tear for nearly three months now, so any change in trend should be noticed. I do think it will break, and I do think the stock market will care.

Dollar-Yen Currency Pair

Overbought/Oversold Oscillator -- NYSE

Overbought/Oversold Oscillator -- Nasdaq

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volatility is quite low here, and we could see some downsides here in the short term. ...



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