Another Fed Governor Offers His Opinion And Stocks Stage An Afternoon Selloff.

Another day of early gains was wiped away again, with the stock market reversing in the afternoon to close near or at the lows of the day. This is about as painfully obvious as can be that this is a bearish market. Constantly reversing intraday to close in the red is not healthy.

The markets basically all fell the same amount. The DJIA fell .65%, the SP 500 fell .61%, the Nasdaq fell .51%, and the SP 600 fell .47%

Volume was lower across the board but the late day reversal came on a pickup in volume. Another negative. Speaking of negative, breadth was negative on both boards today. The NYSE had decliners over advancers by a 5-to-3 margin; the Nasdaq had decliners winning by a 8-to-7 margin over advancers.

The SP-500 has now joined the Nasdaq in trading below its 50 and 200 dma. That is not what you see in a healthy market. Obviously, in a bull market you are not going to be under those key lines. This is another signal to stay on the sidelines and let things play out.

Another constant negative situation playing out is the top industries in IBD's industry list getting pounded. This simply does not happen in a normal pullback. Another thing that doesn't happen in a normal pullback is the rotation of leadership into defensive stocks. Defensive sectors don't go up in a bull market. They go up in a bear market. They are going up.

As each day goes by I keep selling more and more of long my long-term winners. My portfolio is starting to shrink noticeably now and my shorts are starting to pile up. This does NOT happen in a healthy market.

I am not sure how many ways until Sunday I can keep saying the same thing. Please, I beg of you, if you are confused about this market, go back and read the past three weeks post. You will see how I react and acted to the situation that has played out and why my account is going to be hitting all-time highs soon while the markets fall or flop around.

And if you find any of this helpful in your investments, you should know you are only getting half of the conversation. I have many bright contributors on Investors Paradise that offer many intelligent post for readers to chew on. I encourage you to sign up and join the discussion.


I shall see you tomorrow. As always, stay positive, keep smiling, and keep cash on hand so we can NAIL the next bull market.


New Swing Longs: NONE

New Swing Shorts: EWI IYT EWQ E ADRE UAG WRES BJS PD AL

Longs Outperforming Market: HSR-46 JOBS ANEN CTCI-25 SMSI-96 BWP PCLN DDS ATRO STRL-40 FSTR LYV SHFL SHLD CXW TZOO EGY JCP KEX-41 LMIA-105 PKE HEIA-42 PAY-48 UVN DDE CBEY KNOL-148 OPTV-26 MGLN HWAY LCC-128 ACTG-87 USB Q-67 DIS CCI-86 SBIT

Shorts Outperforming Market: SIVB CRXL SWC JOYG USG ASA TMO DIA EWY CLF WSM DB CE ILF AMAT FCX IYM EWZ RTP NUE RES MNST ERIE ATI RS STLD

Stocks On Radar Screen: FLO