The stock market finally cracked today, on an increase in volume. Indexes fell anywhere from 1.5% to 1.1% with volume rising as the market fell. This is the third distribution day in the last five sessions for the Nasdaq. That is not a bullish situation for anyone looking to purchase new longs, since 3 out of 4 stocks follow the general trend of the market.
What is the good news: The SP600 and Nasdaq are very close to their 50 day moving averages. This would be an ideal place for a bounce. If the bounce comes on lower volume it may not hold and if the indexes break through the 50 day moving average the next support is the 200 day moving average. So a short term bottom may be near. However, a lot of bulls (newsletter survery, AAII poll, and the sheep in #daytraders, #activetrader), ugly charts (DELL, CSCO), topping charts (BCON), and distribution days in the indexes indicate a bounce may not hold.
The next best thing would be a long sideways consolidation lasting a couple of months that breaks out to the upside. That would create tons of beautiful bases in stock charts. Chances of that are low, I would assume, now that oil finally matters.
I would be careful here, if you are buying stocks. The market is not presenting a lot of great charts to buy and stocks like DKS are a dime a dozen the past week. Keep cash high and wait for this downtrend to run itself out.
New Swing Longs: MRY
Swing Longs Outperforming Market: BCON ANX DCEL NR
New Swing Shorts: TWI TJX CATY JCP ANF HIBB EENC BEBE
Swing Shorts Outperforming Market: CKCM AEOS
Under The Radar: ADST TVIA ROS ELT
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