OK, everybody. All together, now: Let's blame Apple (AAPL).
We'll blame AAPL for holding the market up and we'll blame it for taking it down. I suppose it's better than blaming Greece yet again. But should we?
As I have noted for several weeks now, there have been so many stocks just leaking that it was bound to catch up to Apple one of these days. But rather than talk about one stock, let's check in on the Trannies, since I have harped away about them and their leaking for weeks now. First of all, I see they finally garnered some attention on Wednesday as, all of a sudden, folks became concerned about them.
We did see a break of 5200 on the Transports. I would now look for a bounce from the 5140-ish area. Some might note the 50-day moving average line is just a bit lower than that, so I suppose it's possible we get down there and bounce. But I see a spike low from late January around 5140 and my view is that spike lows tend not to break the first time down.
Of course the fact that even the folks on television finally became concerned about the Trannies makes me think we should bounce from that general area. But note that a bounce from there should find resistance at the underside of the thick black uptrend line (currently around 5300).
Then there is this week's Investors Intelligence readings, which showed an uptick in bulls to 54.8% and a (finally) downtick in bears to 25.8%. Should the market manage not to fall apart in the next one to two weeks I would expect the bulls to get to the upper 50s and the bears into the lower 20s. I consider those levels to be giddy.
On an extremely short-term basis, we saw bearishness fly right into the market after Wednesday's action as the put/call ratio zoomed right back over 100%. As a reminder, it did this on Friday and we rallied on Monday. Yes, we gave it up on Tuesday and Wednesday, but we did rally the next day after a high put/call ratio.
I will not review all the indicators, since I have noted the overbought ones for at least a week now (ok, maybe longer) but suffice it to say that the intermediate-term indicators are having their first pullback from higher highs now.
I would note that the channel on the S&P has still not broken. On Monday I noted the 1335 level, which we have not yet even visited this week. While the channel line comes in around 1340, I'd still use that 1335 area as the support because it is where we have bounce on every dip since the employment number.
I would remind folks what I said on Monday, if 1335 breaks that would get folks talking. If you think the Trannies got them talking Wednesday, a break of 1335 should bring out all sorts of downside targets to choose from.
One final point to make is the Oscillator is finally coming down. It's still a bit murky timing wise, but we might get back to a decent oversold reading by month's end.
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More by Helene Meisler
