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Can the Market and Key Stocks Rebound from Sell-Off?


US stock futures point to a down open Wednesday, following the path world markets lower. Concerns about the European debt crisis are back to the fore, with anti-austerity strikes and protests taking place in Greece and Spain. Yesterday, hawkish comments from non-voting Philadelphia Fed Governor Charles Plosser weighed on the market, with the tech-heavy Nasdaq getting hit the hardest.

Last night Jim Cramer, on his CNBC show Mad Money, shared Scott Redler's analysis on Apple (AAPL), Google (GOOG) and the S&P--and I think it was spot on. Professional traders know not to chase exuberance at new highs in the market, and anyone who did over the last week got punished yesterday.

Apple (AAPL) made a remarkable run leading up to the iPhone 5 release, and was up 70% for the year. The stock had trouble holding above the psychological $700 level, which was a sign to be on your toes for a potential complexion change. The level that traders should have been stopped out yesterday was the previous day's low of $683. Now, AAPL has sliced through its 21-day MA and will need to climb back above it in the next couple sessions in order to keep short-term bullish composure intact.

Google (GOOG) finished yesterday flat while the market was down, but the topping tail it put in was not pretty. After soaring to new all-time highs with hardly a rest over the past two weeks, it was natural for this stock to take a break and pull-back a bit. The key will be measuring what yesterday's reversal leads to. It's not game over for this stock, but see whether it breaks its 8-day MA in the coming days and the 21-day comes into play.

The precious metals have also started to put in some toppy action, at least on a short-term basis. New asset purchasing programs from the ECB and Fed triggered a massive move on Gold (GLD) and Silver (SLV), but now that rally is looking a bit tired. Both metals are set for a lower open this morning, with GLD opening below the defined floor that has been put in place over the last two weeks.

Today's action will be key to measuring the speed of the rally going forward. If the S&P can hold its 21-day MA and key stocks like AAPL can reclaim lost moving averages, we can see the rally resume with some speed. If we hold below those levels and probe deeper retracements, we could see a longer pullback and digestion period.

*DISCLOSURES: Pete Renzulli has no positions