Nasty Reversal By The Indexes Near The 50 Day Moving Average Might Signal That New Lows Are Ahead

I know a lot of people may not like to hear that but I want everyone to remember that I ONLY use charts to make ALL of my trading/investing decisions. I have not and will not be bullish on stocks until I see stocks bottom out and work on bases. Then and only then would I consider going long this market.

Instead, for right now, I will continue to stick with my short bias as the trend is very down and all I am doing is simply going with the downtrend. Now remember, just because I expect the downtrend to resume does not mean that it will. I am only setting myself up for more profits on the short side because, for one, they have already made me good money in a year that was dominated by massive losses in most portfolio. And two, they continue to be the only setups that are working in this market.

Recently, I went long a few stocks. At first everything was looking OK. But now as this market starts to plateau at this overbought condition near the 50 day moving averages, a few stock, once again, have set themselves up for future profits. How big are those profits going to be? Well here is a showing of my top holdings right now: top longs/(shorts): ANCI 71% QCOR 37% (TITN 45% CETV 70% SPG 22% CEO 38% SDA 67% GGB 59% RIMM 46% AAPL 37% ATHR 32% SBAC 40% AMX 42% CYT 50% POT 46% CEDC 43% MOS 55%).

As you can see a lot of the shorts have produced some nice short term gains. How did I make this money? Simple. I just followed the trend. Just go with the flow. Trust me, it will pay off.

I have been saying almost the exact same thing for the past few months now and I see no reason to change that. The trend is down, the money is being made in the shorts because being long is wrong, and until I see the market stabilize above the moving averages, strong accumulation enters the market, or new leaders show up I am definitely going to keep cash as my top priority. Not losing money here is as good as making money to me.

I wish everyone well, have a great day/night (depending on where you live), and we will do this all over again tomorrow. :)