I'LL REPEAT...IT'S ALL ABOUT THE DOLLAR

I've been flooded with emails, after the market closed, asking what I thought about AAPL and IBM. Everyone is wondering if this will trigger a big sell off. My answer is that it might...but it all depends on the dollar. If the after hours results of AAPL and IBM hold up in the morning, these stocks should gap down pretty big. They should then cause many other stocks...particularly tech stocks...to gap down as well. I still think that any further selling will be determined by how the dollar trades. Otherwise, I think that the sell off will again be viewed as a buying opportunity...and I might finally treat it as a buying opportunity. You can follow the dollar using the UUP. You would like to see a close above the 10 day MA. At the time of this posting, the dollar index is trading right at its 10 day MA. It could possibly move above it tomorrow. They key area to watch for on AAPL is $294. If the stock trades below that price, it will likely be in for a bigger correction...possibly to around $250. If it can stay above that price, the buyers might be able to come back in and push it back up to a new high. Watch the financials. If JPM, BAC, and WFC can move above Friday's high in the next day or two, I might believe that they could rally higher (I have to respect the high buying volume today). If they trade tomorrow below today's opening price, they will likely drop further. If AMZN trades below $157, you could look to buy some puts. If it holds above $157 and starts to move back up, you could look at some calls for a short term pop. If you can, try to look at how these stocks are trading during the last hour of the market tomorrow. One other thing to note....for the second time in a week, the VIX and the market both closed higher for the day. Remember, there is usually an inverse relationship with the VIX and the market. When it starts to trade in the same direction, you need to pay attention. It seems that the professionals are starting to take on some insurance for their bullish positions. They don't start doing this unless they are worried that there could be a bigger than normal pull back. I don't detect any panic yet, but we will see how the market trades the AAPL and IBM earnings tomorrow. CRUS could be tied into the AAPL trade. If CRUS looks like it will close below $16, look to buy puts on it. It could end up moving below $13. VMW also looks like it could move much lower...possibly to around $66. AKAM looks like it could move a bit lower...although you would want a stop above the 50 day MA. NFLX looks like it could move lower and test its 50 day MA (around $142). GMCR has rallied back up a bit over the last few days. This one looks like it is getting ready for another move down. This could be one of those "second chance" trades if you missed the first one. You could use a close below its 10 day MA as confirmation. GS reports earnings tomorrow. It is currently in a classic ascending triangle pattern. If it breaks above the $157 resistance, this stock could move up to around $175 within the next few months. With many on Wall Street feeling that this stock might disappoint, we can almost guarantee that it will move higher on its report. This has been the trend so far this earnings season. The stocks that have been doubted going into their earnings (GOOG for example) have done very well, while the stocks that have expected to impress (AAPL, IBM, INTC, etc) have not done well. This could be another example of market manipulation during earnings season. We might do well to trade against the so called "experts" this earnings season.