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Minyanville's T3 Daily Recap: Apple Weighs on Market, Breaks Major Support


One of the more remarkable stock-specific stories of the day was Groupon.

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Less than an hour before the open Tuesday, the market finally looked set for an oversold bounce. German GDP data was better than expected, and the oversold S&P was set to open almost 10 handles higher. However, a lack of consensus in Greece sent the government back for new elections, pushing the futures lower into a down open.

Stocks twice tried to bounce in the morning, but were still unable to pick up any momentum. The action remains heavy and it is not attractive to buy this dip yet. That doesn't meant a bounce is impossible, but from a risk reward perspective it just didn't make sense for me.

Stocks accelerated lower in the last 90 minutes of the day, with the S&P finishing down 0.58%. Markets took out the low of the day, $133.84 as well as the premarket low, $133.61, in the afternoon to close near the lows. The next level my firm has been talking about below these levels is $131.80-132.20 (38.2% Fibonacci retracement zone).

As at trader, it's hard to use stops and re-visit trades, and today was the day you had to do it a few times. We tried to figure out if the "oversold bounce" would go hours or days; it went for hours!

The macro support levels I have listed could be here sooner than expected. 1318-1320 was the big level -- let's see how the markets act in this area. If it hits, the measured move of the Head & Shoulders top would be 1295-1305.

Apple (AAPL) accelerated to the downside at the end of the day after breaking yesterday's low and major pre-earnings support at $555.00. Although the market is currently oversold, Apple looks to have more downside it its future.

One of the more remarkable stock-specific stories of the day was Groupon (GRPN), which was up around 18% yesterday ahead of earnings and then an additional 25% after hours following the better-than-expected numbers. However, the stock put in a hideous daily bar (for those graphing the action), giving back almost all of its overnight gains and finishing up only 3.71%.

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DISCLOSURES: Scott Redler is short SPY (covered most will use buy stop at $133.60). Short AAPL - will cover if we trade back above $557.
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