Market Recap – Oversold Rebound Begins and Priceline Top?

The market rebounded today after being heavily oversold as highlighted here last night. The headlines are citing Alcoa’s (AA) positive earnings as the main driver, but the reality is the market was coming off five straight down sessions in a row and gapped at the open. I’d love to see how many times in history Alocoa has single handedly caused such an effect, because it probably has never happened.

Looking ahead short term (is the next week or two), any continued pull back higher off yesterday’s lows should be considered as an opportunity to trim exposure, tighten stops, etc. If the S&P 500 can push back above 1400 then most likely this was just a scare and we are heading back higher. Very short term (ie tomorrow, Friday) the key level to watch is the 50 day moving average. Will it now act as resistance (as it did today) or will we regain ground back above it. The latter is bullish and the former bearish.

A look at the intraday action,

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Updated market analysis below. Stay frosty (sharp) out there!

And tonight I also have some good and most important easy to understand analysis from the StockCharts.com blog on Priceline (PCLN). Priceline and Apple (AAPL) are the two major market leaders right now. If both of these stocks top and start trending down then it will effect the overall market.

Priceline has been one of the top performers over the last four months, but a correction may be in the cards after a high-volume bearish engulfing pattern. Notice how the stock opened above the prior close and then declined to close below the prior open. The strong open failed to hold as the prior candlestick was completely engulfed.

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