Successful Debt Offerings In Europe Ease Fears

The market is basically flat in early trading, despite a strong housing report here in the U.S. Housing starts for August climbed +10.5%, which was much better than expected.

The euro is also bouncing this morning after successful debt offerings in Ireland, Greece, and Spain eased fears there. The bounce in the euro is coming at the expense of the dollar, which is down a bit. Commodities are also down slightly, with oil down to $75.91 and gold off a bit to $1277.

The big news event today is the Fed's meeting and the policy statement that will be released at 2:15pm EST. I don't expect any change in their directive or language. They will probably acknowledge the slowdown in the economy, and say that policy will remain attentive to that. Either way, with the market still overbought, we could see some selling once the news is out.

Among the ETFs, financials and industrials are leading the sluggish action so far, while consumer staples and basic materials are lagging.

Trading comment: Yesterday's action was pretty impressive. We now have new support levels for the S&P 500. The first area of support on a pullback should now be the 1131 level that the market broke through yesterday. After that, the 200-day should come in as support, which is currently near 1116.

Most of the leading stocks are now a bit extended after a multi-week sprint higher. I haven't trimmed any of our positions, as I still think these stocks will be strong into year-end. But the market has been up for three straight weeks, so I still think that some pullback is in order, even as I have been early in calling for it to start last week.

Apple (AAPL) broke out to a new high yesterday, which is one of our biggest positions. I think the iPad is going to do monster numbers this holiday season, and AAPL stock is still cheap on a valuation basis. My 6-12 month target remains $350.

long AAPL