A bounce in oil and poor reactions to Google and Bank of America earnings gave the market a good excuse to sell off, but buyers found reason to buy the oversold market. That and option expiration were probably responsible for the market holding up all day despite the negative news flow. The early responses to earnings reports have been poor and we have hundreds of earnings next week, including C, INTC, IBM, and AAPL. Apple has been acting poorly but still isn't finding any major support. There are worries that its supply chain is impacted by Japan disruptions. On the daily chart are a series of lower highs and if AAPL fails to hold $327, then the 200 day moving average at $307 might become the next target. It is no longer at a 20% weighting but even at 10% it is still significant. In addition, the VIX has not closed at this low since July 2007. Is it broken? There are a lot of cross currents next week from earnings to a shortened holiday week. We will need a good showing to continue the current bounce. We could have some hang over early in the week from the option expiration and tax season (extended for 3 days), but bulls may again find support as we get closer to the holiday.
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