The S&P opened higher this morning after news of a Cyprus bailout agreement, but the enthusiasm quickly faded as the index was rejected at resistance near all-time highs. The intraday sell-off was triggered by comments from the Dutch Finance Minister, who opined that the Cyprus bailout could become a template for future European bailouts, which is not necessarily a good thing.
We continue to see erratic action in the market with some faulty signals, but up to this point stocks have shown impressive resilience at every sign of weakness. At the end of the day, the weakness was contained as the S&P finished down only 0.33%, but you cannot ignore some of the smoke coming from under the hood of this market.
Apple (AAPL) tried to follow-through further to the upside today but could not overcome broader market weakness. The stock still finished the day up 0.36%, but the extension may be on hold for now. Overall, recent price action in AAPL has been very constructive as it has broken the multi-month downtrend and climbed back above the 50-day moving average.
Many stocks that returned to their winning ways Friday gave back a large portion of those gains. Chief among them was LinkedIn (LNKD), which finished the day down 3.11%. After consolidating above its 21-day moving average and then making an impressive move back toward highs, today's back-filling action could be evidence that LNKD needs more rest.
The banks right now, I think, are an important barometer and will be increasingly important to watch. Goldman Sachs (GS) has been weak since having its capital plan rejected by the Fed, and it remains one of the American banks most sensitive to European crisis headlines. GS briefly plunged below its pivot support this afternoon before paring losses into the close, and feels like its hanging on by a thread.
*DISCLOSURES: Scott Redler is long S, MGM, BAC, F. Long DDD call spread. Short SPY, HPQ.