The market closed off the highs Tuesday but still finished with healthy gains after breaking out of the recent mini range. The Nasdaq was the strongest index, finishing 1.5% higher on the day while The Dow and S&P both gained around 0.6%. The market did get a bit of a rug pull in the afternoon, but as we have said many times over the past two weeks, you can't have great expectations in an indecisive tape like this. Early in the session after the gap up we got a clean breakout above 1420-1423 in the S&P, but then got rejected at the 1434 resistance we talked about in today's Morning Call.
To put it in perspective, we've had a nice move from the November 16th lows of 1343 and each leg higher is going to be more difficult. It's hard to sustain rallies when you see a lack of broad participation. Throw in the wildcard of the Fed announcement tomorrow, and you have a recipe for indecision. The uncertainty of the fiscal cliff also continues to prevent sustained momentum in either direction.
Continue to trim and trail winning positions and don't fall asleep behind the wheel. The market was able to bounce a bit in the last half hour of the session to avoid a short-term topping tail, but right now this action is spinning traders in circles. Make sure to look for Off the Charts tonight where we will go over the technical action more in-depth.
Also be sure to sign up for the free webinar: How to Enhance Swing Trade Returns with Options on Wednesday at 6pm ET featuring T3Live's Scott Redler and OptionMonster's Jon Najarian (who is also a frequent guest on CNBC's 'Mad Money') Scott will analyze recent technical action in equities while Jon will provide perspective on how you could have maneuvered the same inflection points using options.
Apple (AAPL) helped the Nasdaq show relative strength today, finishing up 2.1%. After opening 2% higher this morning AAPL surged in the first two hours of trading and was at one point up nearly 4% on the day, but faded and was only able to hold onto those pre-market gains. This morning Scott Redler did a brief cash-flow strategy video on AAPL and the trade idea played out well.
Salesforce.com (CRM) was a standout in the market today after we highlighted it several times over the last two weeks on Off the Charts. The stock had been basing very nicely below major levels, and this morning ignited right off the open to make new 52-week highs. CRM held higher while the market pulled in this afternoon and finished with gains of 4.2%.
*DISCLOSURES: Marc Sperling is long CRM, GS, RIMM, MA, CMG, GNRC, RIMM calls, AIG, GS calls, ZNGA, ZNGA calls, ANTH, AOL calls, AOL, MLNX, calls, CMG calls, MNST calls, C calls, JCP calls, BIDU calls, FB calls, AAPL calls, FSLR calls, SHOS.
Scott Redler is long AAPL, BAC, JPM, GS, INTC, MGM, FB. Short SPY.