Another day, another choppy tape. Today, markets opened flat, spiked higher in the first hour, drifted lower, and are now rallying again. At present levels, all major indexes are flat for the day. However, both bonds and the VIX have a bid — these two instruments should be monitored closely as we move forward. Their strength is a sign that there could be some fear creeping back in to the market, and a little more downside could be in order.
Among the leaders today are formerly loved large-cap tech names. Many of these stocks, including HPQ, CSCO and INTC have had a rough ride this year, and could be experiencing nothing more than an oversold bounce. En vogue large-cap tech names, including AAPL and GOOG, are struggling.
CHART OF THE DAY
Nokia Corporation (NOK) – Similar to Research in Motion (RIMM), NOK has had a rough ride this year, down about 30% since January. However, the shares have bounced nicely and recently perked back above the 200-day moving average(red trendline). Since bottoming in July, short interest and the equity’s price have nearly doubled over that short time period. Given the strong price action and continuing skepticism, further upside could be expected from here. A quick rally to the $5 level doesn’t seem out of the realm of possibilities.
WHAT I’M EXPECTING
I hate to sound like a broken record, but this range of 1385-1425 continues to hold. Trade the range, and until we break, try to find favorable stock setups and/or trade around news. I’m still expecting a rally into the end of the year.