The final minutes of trade today saw a reversal of the Russell 2000 and managed to close up on the day. A look at the 60 minute chart shows that there is a fairly good probability of a breakout on Tuesday. Adding to the bull case is that US Dollar broke and more importantly closed below its brief uptrend line and my guess is that we'll see lower lows which should fueled the market.
The one sector that traded higher on Monday but closed well off of it's lows is the Retail Sector which we have been suspect of for several weeks. I expect to see this sector struggle in the coming days. I had KORS on our watch list and was looking for a close above $53.60 and we got it. I'll be looking to add to KORS on Tuesday but my position will be small and my stops tight given the weakening of the Retail Sector.
I received a bunch of emails today on APPL with the most frequently asked question being of course “Is Apple a Buy?” My answer sure, why not just use a stop loss below the day's lows of $498. I would use call options as they are very liquid and increase the stock gaps down your maximum downside. The stock is at the very bottom of a pennant formation and is a trade only. If you make a profit don't stick around to long until it breaks out of this formation.