The earnings news continues to disappoint as TXN and IBM are down after hours. SNDK is getting hammered in sympathy with AAPL. I will be stopped out of a short term long position in SNDK tomorrow morning unless something unexpected happens overnight. It will be interesting to see if it rebounds after it reports earnings on Thursday or falls futher. Even though TXN is being sold this evening, the chart shows that it should find support at the 50% to 61.8% retracement zone after the impulsive move off of the 7/1 low.
This week is shaping up to be a rough ride, but it is still way too soon to bail on this fledgling rally. The sentiment is just way to bearish to expect a downside breakout right now, in my opinion. That doesn't mean the market has to rally over the next several weeks. Perhaps it just treads water before a fall selloff. If it does, it will be a doozy of a selloff. But let's not get ahead of ourselves. We have several weeks to go before things would most likely turn nasty.
There was a very good interview with Michael Covel, who wrote the book "Trend Following", at Financial Sense - News Hour this past Saturday. It prompted me to take at a look back a simple trend following strategy that I have toyed with in the past in a new way. The results were surprisingly positive, and I will share them with you in the near future.