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Minyanville's T3 Morning Market Call: Markets Back on the Rise After China Stimulus


Apple is set for a flat open while Google looks like it will open higher this morning.

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The Shanghai Composite rallied 2.6% as China released a new stimulus package. Most indices bounced back after a two weeks of selling. The Oscillator went from +60 on September 14 to -30ish yesterday as the S&P (INDEXSP:.INX) went from 1474 down to 1430. A 44 handle move off the highs is usually a spot to cover some shorts and nibble on some longs. If the year were to close today, the S&P is up 14%+ and the Nasdaq (INDEXNASDAQ:.IXIC) 18%+ and still everyone seems to be complaining about the markets.

Anyway, it would be nice if yesterday's low sticks, moving forward. At least we have a new point of reference (1430) to trade against. Under this level was very big support around 1422-1426. Micro resistance stands at 1435-1436, and a close 1440-1442 could rekindle some upside momentum. If the bears want this pullback to continue, they can't let bulls take back 1449-1451.

High beta tech lost some momentum last week. Most stocks fell below their 8- and 21-day moving averages, which leads to a slowing of the intermediate-term rallies (meaning you can't just buy every dip and add on break outs). This timeframe is more selective and there is two-way action. Most of these stocks are still above their 50- and 100-day and macro investors need not worry.

Google (NASDAQ:GOOG) is much stronger than Apple (NASDAQ:AAPL) overall, as the only real pull-in for Google was from intraday highs on Tuesday. Apple retraced all the way to its lows from the iPhone 5 event day. In keeping with that trend, Apple is set for a flat open while Google looks like it will open higher this morning.
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Scott Redler is long SPY, AAPL, LVS, GS.
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