Big Reversal & Apple

I thought we were close to a trading bottom yesterday and today we got that big intraday reversal.  Just after lunch, the markets all turned around and after being down most of the day pretty hard.  They began to rally and the Dow was up about 75 points before pulling back.  Now, we didn’t get so oversold that I covered all of my short positions, but I did cover some of them when the late day rally faded to lock in some really nice gains from just last week when I put more short on.  

I don’t think we’re oversold quite enough for a real long sustainable rally.  So, it’s possible we get just a couple of days of up and then the pullback continues.  But, we were oversold enough to cover some shorts.  After all, we had fallen 6 days in a row, and about 11%.  This would have been the 7th down day in a row.  You don’t typically see that. As with any rally, we have to monitor the quality of it.  I’m not holding my breath.  If we’re range bound, the Dow bottomed roughly right where it should have and perhaps it makes a run up to the 9000 level once again.  You do have to love an intraday reversal though.  Those are the best kind, especially when the volume picks up as the market is running up like it did today.

Apple

I never got a chance to buy more Apple today as rational investors came in this morning and pushed the price back up after that ridiculous 10% sell off after the bell last night when Steve Jobs announced his leave of absence.  After my radio show this morning when I mentioned it would be a buy if it opened 10% lower, it was upgraded by some firm. What influence I have (yeah, right).  But seriously, I think Apple at these levels is very attractive not only for a trade but for an investment.  Earnings are due out later this month and we’ll see if they can surprise us all.  If the stock falls because of temporary weak Christmas sales, I’d buy it on that dip as well.

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