What is going to be the thing that is going to turn this market around?

A strong GDP report or good earnings and a product announcement from AAPL

How about loose monetary policy from a Fed announcement; what about a call for “tax breaks” from the President in his State of the Union speech?

Bernanke getting reappointed?

We got all that and more last week and this market still has no bid to it. I’m not sure how much more “good news” we can handle.

The SPY was down 1.12% but it felt a lot uglier than that, at the end of the day I was amazed to see that we were down only 53 Dow points. AAPL broke the 108 level around 11:00 am and the market just couldn’t catch a bid after that. I don’t see any real level on AAPL to watch right now other than Fridays low (190.25) but I will continue to monitor him as a market tell.

All last week I kept reading and hearing how deeply oversold we were and that these were not the levels to sell breaks of support. I think AAPL may have proved otherwise.

With that said lower highs and lower lows in 7 out of the 8 last sessions so a little bit of a breather tomorrow would not be unexpected. I would welcome it because I think will set up some nice short spots for later in the week.

My strategy for tomorrow will be much the same as it has been recently. Look for important moving averages and see how the stock/etf acts when it gets there. I usually let a few pass to see if we get a bounce or if we are crashing right through them. When I play the bounce I wait for the level to be breached and buy going back up through the number. That way you are not catching the falling knife and you have a defined stop. And I don’t buy the pullback, second time through the number I am out and deciding if I want to get short.

The following levels are some of the things I will be watching; too see if we are going to get some kind of bounce or if this selloff is going to continue.

GLD flirted with the 105 level on Friday (105.27 was the low) if you are long gold you really want this level to hold, the next clear support I see is 101.90 the 150 day MA and then 100.

IWM 60 held Friday, 59.97 was the low, and we need this level to hold. Next time around it probably won’t hold up and the next support level I see is around 58.58 the 150 day MA.

The 20 day MA looks like it wants to roll below the 50 day on the transports (IYT) we need the $70 level to hold, the next support is 150 day MA 68.72.

KOL is coming into the 150 day MA (31.31) and could be worth a bounce play there.

Same with MOO 40.17 (150 day MA)

OIH 114.53 (150 day MA)

QQQQ 41.89 (150 day MA)

SLV 200 day MA 15.47

SMH 200 day MA 24.19

SPY 150 day MA 105.18

USO is trading below the 200 day MA (36.53) it tried to break through it on Friday morning but failed. This good for gas price but probably bad for the global growth story.

Basic materials UYM had a really poor bounce off of the 150 day MA next stop is the 200 day MA 24.91

XLE 200 day MA 53.03

XLF 200 day 13.55

If this sell off continues my feeling is we are headed for DJIA 9700ish right around the November lows.