Markets Suffer Nasty Distribution Day; Still Holding Above Their 50 Day Moving Averages

Stocks sold off pretty hard today as GOOG and a spate of bad economic data was the blame of the day. The SP 600 fell 1.9%, Nasdaq 1.1%, SP 400 fell 1.1%, SP 500 1%, and the Dow Jones .9%. The selloff came on heavy volume and very poor breadth. The volume was well above the 50 day volume average, adding to the losses.

This was the worst day for the markets since January 20th and the first distribution day since the Dow Jones followed through on Valentines day. The selloff today helped turn most trends in the indexes down to sideways for the sub-intermediate and short term time frames I trade on.

The stock market could be going under a rotation from the oil group into the technology group, as I still have plenty of stocks in the technology and bio groups that are holding up well after today. I did take some small hits here and there but overall the pullbacks were quiet and normal looking.

We have to see if this is a one day event that will have buyers snap up shares tomorrow or if we are setting up for the rollover from all the churning this year. If you look at the Nasdaq you will see that we have had plenty of trading days with volume well above average and yet we are going nowhere. This is either a high volume consolodation or churning. My guess is it is churning.

But market traders are looking for anything that remotely looks like bad news to sell stocks and they seem quite nervous and bearish. This amount of pessimism would actually be contrarian and would set us up for even more highs. And that is not out of the question at all, with the way the bears and liberal media are acting. With the bears pouncing on the day so hard it could lead to a bounce.

So even though the indexes look like churning to me (I have said this before; search the blog), I simply hear to much bearishness and see too many good charts still to switch sides.

We shall see what the markets do tomorrow. Be ready for a rally and be ready for a selloff. That is the only way to be happy and positioned correctly no matter what the outcome is.

Great luck out there!

New Swing Longs: STAA MONE

New Swing Shorts: NONE

Longs Outperforming Market: BOOM-362% CRDN-72% MORN ERS-142% SLW-77% STX-26% SIRF-135% KEX MFLX-184% PAY-26% WIRE-112% MTU SCHK KEYS-38% MEK-31% RATE-107% ATHR-70% RAIL-74% QCC MMK SPWR-59% SEED SXC KNXA-37% DRH EVST-36% ANX-43% CLG-70% AGT DMX-30% SNG ESLR-121% LRCX-27% RNAI-30% TWTC-79% NVAX-28% MNG-98% LEND SPSX-27% ADLR-84% BEAS CTXS TNOX VTS AMKR DSGX-39%

Shorts Outperforming Market: NONE

Stocks On Radar Screen: CREE CEGE BRKS DXCM

Blowup Of The Day: HSP -- I am going to leave with a 12% profit on the remaining position. Original buy date was in mid May.