It was another day of losses for the major market indexes, with the blame being put on AMD's earnings miss and DELL's profit warning. The funny thing about all of this is that if the markets would have been up the first sentence would have read like this. It was a day of gains for the major market indexes, with GOOG and MSFT's positive earnings surprises helping send stocks higher. As you can see this is all just baloney and is necessary for the news media to have something to report on. The fact of the matter was that there were more sellers and people offering stock than buyers and people bidding on stocks. But I guess if you said that everyday nobody would watch CNBC.
Anyways...The SP 600 led to the downside with a 1.6% loss, followed by the Nasdaq's .9% loss, the SP 500's .7% loss, and the Dow Jones Industrial Average's .5% loss. The biggest nastiest hit was to the Semiconductor Index with a 4.8% semi-crash.
Volume was higher on both the NYSE and the Nasdaq and was also well above the 50 day volume average on both exchanges. This higher volume selloff, with the indexes closing near the lows of the day in the bottom half of their intraday range, and indexes falling more than .5% give them another distribution day.
Breadth was negative by a 2-to-1 margin on the NYSE and by a 3-to-1 margin on the Nasdaq.
It was a pretty crazy week with another one day Fed blastoff followed by a much quicker failure--just like the missile launch of the tapeodong 2 missile by the brutal and disgusting North Korea regime--that saw the Nasdaq and SP 600 make closing lows for the year. This negative action along with the lack of new breakouts has basically ended any rally attempt that any of the indexes have tried to produce since that crazy one day rocket ship move on the indexes. But the NYSE and SP-500 are showing a bit of strength since it is home to safe havens and big-caps which normally get a bid during downtrending markets.
However, with that itty bit of strength comes some negative observations on the indexes. The Nasdaq is in a solid downtrend with a "death cross" confirmation, the SP-500 confirmed its downtrend with a "death cross" move of its own on Wednesday, and now the SP-600 is one or two days away from having the confirmation signal and the Dow Jones is about five days away from confirming. With all indexes in a downtrend with "death crosses" on ALL indexes you can be sure that being long is the wrong play period! Time is going to be needed to fix this damage and get a rotation into the new leaders. For now, the weak links rule. Hence the new long in Altria (MO).
The trend is down. I don't know what else to say or how else to say it. This is the time to stay patient, keep cash on hand, and just wait till the market follows-through with leading stocks breaking out of fresh bases in exciting industries. We are no where near that time yet. Not with the Food, Beverage, HMO, Medical, Leisure, Transportation, and Tobacco stocks taking the lead. These are bear market leaders.
There will be plenty of action next week as earnings are now rolling out in full force and the war in the Middle East, of course, will keep the market distracted and busy. Don't be a gloom-and-doomer! Stay positive and patient and KNOW that another bull market will come around the corner. It may not be this month or next month but until then make some money and/or keep your money idle so when the perfect moment comes you will have plenty of capital to put to work.
Now, if you are shorting this market with me, congratulations. It has made up for all those BS small longs I have been taking and a WHOLE LOT MORE. If there is more to come, all-time highs in the accounts shouldn't be too far away. Not bad in a market with the Nasdaq down 15% and the SOX index down 30%. And heck if I get a horrible reversal that forces me to cover all my shorts do you think I will be upset? Of course not! Because then I can go long, if there are plenty of HOT charts setting up, and make real money. Remember, the most a short can go down is 99.9%; the most a stock can go up...let's just use HANS from 1996-now as an example...53,000%. I like my chances on the long side!!!!!!
New Swing Longs: MO -- for more info and charts on longs and shorts go to Investors Paradise. Please sign-up to post and chat with me.
New Swing Shorts: CAT WTFC LFUS AF MENT CATY DSL CNI HMY TCC FLR SII GVA IFX X FWLT NEM
Longs Outperforming: PMTR-74 DGX IHS-50 CPY ABFS BWP MGLN CVO-109 BMRN DSGX-51
Shorts Outperforming: CRXL SWC JOYG BPFH USG ELY WSM AMAT RTP RES AVID MEOH IKN ZRAN MAFB FRZ ISCA BBBY GTRC ITWO CTCO GYI XNPT PBE MAS ULTI PII CXG AMMD AB EWG RCNI POOL UPL DB EWQ PWC VO IYT TM SUPX NTE GE WFSL PDCO ESIO C AME HTLD BLK OIH OEF MWIV VV HCBK VXF VB HVT WTI CSX RCII FRC
*****I went short OIH intraday on Thursday and did not include it in my blog. However, I posted I went short this stock on my longs/shorts open forum at IP. So full disclosure--as always--was given before/during the trade.*****
Stocks On Radar: REY
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