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MV Weather Report: Tech Sector Freezes Broader Market?


Rain or shine, we review the day's biggest stock stories.

It was a quiet day on Wall Street as stocks traded in a narrow range before closing unchanged. In fact, it was a quiet week for the market as a whole: The S&P 500 failed to close above 950 for the second week in a row.

For the past few trading sessions, I've noticed weakness in tech: Apple (AAPL), Research in Motion (RIMM), Google (GOOG), and Amazon (AMZN). Once again, these traded down today. To me, this could be signaling a shift in sentiment. There's profit-taking in the rally's leaders; will we see more profit-taking into next week?

Here are Professor Jeff Cooper's thoughts from today's Buzz and Banter:

"The usual suspects, Apple, Google, and Amazon are verging on a test of their rising 20 DMAs.

"The behavior at such a test should be a tell as to where they will be pinned for next week's options expiration.

"Interestingly, the 20 DMA on the SP itself is at 920, while the Weekly Swing Chart will turn down on trade on Monday below 926

"A break of 923 today will turn the weekly chart back down.

"A break of the 20 DMA by the S&P now could cut a wider swath than anticipated because 1) we've already seen multiple tests of the 20 day and 2) the cycles suggest the potential for pullback."

The pullback never emerged today and the S&P 500 weekly swing chart didn't turn down at 923. The S&P 500 closed today at 946. The pullback that Professor Cooper mentions could happen, given a slew of upcoming economic data and options expiration on Friday.

Other traders, like Minyanville Professor Quint Tatro, are preparing by resetting their portfolios. Here's a Buzz from Quint on this strategy:

" Not sure what just happened in the span of a few minutes but as I was sitting here watching this already manic tape today, pondering my thesis from last night's Tape Talk it hit me like a ton of bricks. If I think we're going to be choppy and wear people out, why do I have anything?

"So, with that I have cleaned house, selling down all remaining inventory, and taking off hedges. The only thing I have kept is a token piece of West Port Innovations (WPRT) which I'll ride until the cows come home.

"Don't let anyone tell you different. Resetting a portfolio is one of the most exhilarating things a trader can do. Keep the accounts at all time highs, and enjoy cash when you don't have a conviction."

Have a great weekend, Minyans!
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No positions in stocks mentioned.

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