Europe also should remain on your radar if you are trading in this environment. Italy was cut to A from A+ by S&P, and Moody’s is likely, as usual, to follow. Greece is set to continue talks with International Lenders today after a “productive” round of talks yesterday. It’s hard to know what “constructive” means at this point. An announcement is likely to come Wednesday on whether lenders will extend Greece an October aid tranche. In separate news, a China state bank has suspended FX swaps with UBS, Societe Generale, Credit Agricole, and BNP Paribas after those banks had reportedly reached their credit limits with the BoC.
Yesterday the Nasdaq once again showed tremendous leadership on dips. Apple (AAPL) was the star of the day, surging nearly 2.8% to all-time highs in a down market. The stock continues to perform well since Steve Jobs’ resignation announcement, almost like it had a massive weight lifted off its shoulders. Amazon.com (AMZN) made another all-time high as well, but didn’t blast off the way AAPL did.
One area traders noted weakness was in the Chinese internet names. Although they did not fully breakdown, stocks like Baidu.com (BIDU), Sohu.com Inc. (SOHU) and SINA Corp. (SINA) did not participate in the bounce. If the market turns back down, that is a sector traders will likely look to short.
The financials were also weak again yesterday as questions are asked of the major banks. A coordinated central banking effort to shore up the balance sheets of Europe’s most troubled banks last week provided a transitory boost for bank stocks, but they are weakening once again. That will be another area traders look to short.
*DISCLOSURE: Scott Redler is long AAPL, SPY, MGM, LVS.