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Minyanville's T3 Daily Recap: Italy Fears Ease, Markets Bounce Despite Apple Breakdown


US markets rebounded in choppy trading Monday as doomsday fears about Italy recede.

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US markets rebounded in choppy trading Monday as doomsday fears about Italy recede. The Dow surged almost 1% while the Nasdaq squeaked out only a marginal 0.1% gain. Yesterday -- the market's worst day since mid-August -- was triggered by a rapid rise in Italian bond yields. The 10-year bond yield yesterday surged past the 7% 'point of no return', and global investors began to fear the worst in Europe's third largest economy. European policymakers lack to the firepower at this stage to bail out Italy. However, yields pulled off slightly today and a successful short-term debt auction allayed the most extreme fears.

The Nasdaq's relative weakness today can be partially attributed to Apple (AAPL). Traders have been watching the post-earnings box pattern in this stock for the past several weeks, and the resolution came to the downside today. The momentum through the crucial level did not disappoint, either. The former market leader accelerated down through support, and never was able to stage a meaningful bounce, finishing the day down 2.55%.

Another major story in the market today, carrying over from last night, was the carnage in shares of Green Mountain Coffee Roasters (GMCR). The stock traded lower in today's session after losing 30% overnight following a small earnings miss. The stock finished the day down 39%, a staggering fall for a stock that was once a momentum darling of the market. David Einhorn, the hedge fund manager whose bear presentation on GMCR seemed to push it off a cliff in mid-October, believes there is significantly more downside left in the stock.

GMCR joins the likes of Netflix (NFLX), Sodastream (SODA), and TravelZoo (TZOO), among other, as a once high-flying, high-multiple growth stock that has seen a massive correction at the first sign of flagging growth. Short-sellers will likely be surveying the landscape for the next of its kind. That is something we will definitely be watching in T3's Off the Charts newsletter.

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