MLR - Premarket Pulse November 13, 2012
After pausing just below its 200-day moving average, the S&P 500 Index looks to be on the verge of moving further below this key line of support as futures are down sharply this morning over increased European debt troubles focusing on Greece. Our Market Direction Model remains on a sell signal. Meanwhile the NASDAQ is also looking to trade sharply lower this morning once the opening bell sounds.
As discussions regarding the dreaded "Fiscal Cliff" take place today and throughout the rest of the week, the potential for intra-day reaction rallies and increased general volatility increases depending on the news flow. Nevertheless, there remains absolutely no reason for investors to be involved in this market on the long side, and we still consider stocks like Apple (AAPL) and Google (GOOG) as potentially shortable as long as AAPL is unable to clear and hold the 550 price level and GOOG is unable to clear and hold the 670 levels. These levels have served as resistance over the past couple of trading days, and as long as the stocks are unable to stage any kind of meaningful bounce then we can see AAPL having the potential to test the 522.18 low of its prior base formation while GOOG is still vulnerable down to its 200-day moving average at around 640.
Investors should also keep an eye on Trip Advisor (TRIP), which appears to be forming the peak of a potential right shoulder within an overall head & shoulders formation as it bumps up against its 200-day moving average. We see the stock shortable here using the 200-day moving average at 36.49 as our maximum upside stop. Baidu (BIDU) also remains on our list of shortable stocks, using the 10-day moving average at 105.86 as a guide for a maximum upside stop.
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