Marketview: Financials Running, Tech Lagging, MS, BK, AAPL, IBM, HPQ

• Posted by DynamicHedge
• on October 22nd, 2011

We had another big turnaround Tuesday this week as we bounced off support at 1190 $SPX.  Early in the week sentiment briefly vacillated back to Europe being a huge problem and then decided it was absolutely no problem at all.  Bulls are excited because we BTFO of the disgusting range we’ve been in for the last several months.  Lots of people are feeling good because they’re less underwater or not underwater at all on their positions.  Complacency will only rise with the broad market indexes.

While the squeeze in equities continues, no true leadership has emerged. The safety trade, not technology, not financials, is into 52-week highs.  Large cap tech, basic materials, and energy stocks were lower this week.  While I recognize that my general bearishness may color my view I see the lack of leadership in this market as VERY CONCERNING.  I am not bullish on equities, although they could easily trade to my 1271 level.  It’s time to be cautious.  What are the odds that we get a repeat of autumn 2010?  What are the odds we get a replay of July 2009?  The market only gives so many chances.

Be careful about betting on the end of the world.  Bear market rallies can last for weeks and month grinding traders into dusk at they wait for the eventual fall.

Winners: $MS, $BK, $ALL, $C, $GS, $CVX, $WMB

Losers: $AAPL, $SLB, $IBM, $HPQ, $TXN, $GE, $FCX

I’ve been reluctant to include $AAPL in my broad market analysis because it’s on a completely separate trajectory and narrative to the rest of the market.  With the latest earnings miss I will reintroduce $AAPL as just another stock in the OEX and consider its implications in the broader market more carefully.

Winners:

Losers:

Safety Trade:

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