Thursday, July 21, 2005

Distribution Day; Sell the News

Stocks finally started their retreat that has been in the workings for a week--the negative breadth, lower new highs, VIX 10-yr lows, high bullishness, and speculative ugly charts breaking out. The SP600 fell the hardest losing almost 1.7% and the other indexes faired just as poorly. Volume climbed across the board, as stocks retreated. This gave the indexes their fourth distribution day in the past four weeks. Pauses are normal in a good bull market, even though they sometimes look like something worse. This pause is probably just a short term top. No matter though, having a sound strategy to protect profits will keep you alive if the markets start to really pullback.

New Swing Longs: MRTN OXPS KONG DATA OFI SJR VPI USLM VRNT FDG ENER IDBE

Longs Outperforming Market Today: XWG ERS CHRT STTS BTJ

New Swing Shorts: CTAC IGT MDCO JAKK LRCX MNC

Shorts Outperforming Market Today: VRSN

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