Markets bounced back on Tuesday, but volume lacked vigor. It is quite possible that the benchmarks just simply bounced off their 50 day SMAs today, and that was all the pause they needed. I am not of that belief, but that is not what the tape is conveying. That is the essence of technical analysis. Trade the market in front of you, not what you wish it to be. Both indexes recorded inside days, and recovered a little more than half of Mondays swoon. They also closed upon their highs for the session. Earnings season is in full effect now and so far they shall be given a passing grade. Monday C came in strong, and can be viewed as a 27 month cup with handle base on its weekly with a trigger of 48.02. Today Dow components JNJ was up 2%, and KO up almost 6%. AMTD was flat, and GS was down close to 2%. As of this writing YHOO was trading lower by 4%. Some of my favorite plays occur with formerly strong stocks finding 50 day SMA support after weak earnings report. Perhaps YHOO will give us a chance tomorrow near 22.25.
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