Monday, October 10, 2005

Sellers Start Taking Control After One Day Bounce

After moving higher early in the day, the markets reversed to finish near all of their LODs (low of day). Volume was lower on the Nasdaq offering some comfort to overextended bulls but volume increased on the NYSE giving yet another distribution day to an index that has been under attack by them for three weeks now. Now is definitely not the time to be overextended on the long side with so much clear distribution in the market.

There are still zero positive signs on the horizon, with the ugly technical picture of the indexes along with all the broken charts. That along with the lack of emotional selling could paint for a long slow decline. But we will cross that bridge when we get there.

In the meantime, strength continues to get sold quickly and sellers continue to press it to the downside. That is bearish for the market. Until that pattern changes it is safe to stay defensive and wait for the trend to once again become your friend.

Until then, all news is bad news.

New Swing Longs: MSM NMTI FII VICL GCOM

Longs Outperforming Market: NDAQ-173%, SYKE-64%, BCRX-62%, NFLX-62%, RCCC-60%, APT-59%, CRXL-27%, FDG MGN BRLC

New Swing Shorts: THLD DFG BOL BWA NETL

Shorts Outperforming Market: TOL-20%, PHM-17%, WLS TEN LEN MGA RAS RYL CTX EVVV RUTX

Stocks with percentage after them represents the total profits on original position. The stocks without percentages are either new longs/shorts or have not gone up 25% yet or (for shorts) have not gone down 15%.

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