There sure are a lot of broken charts, after today, and the heavy volume on these breaks means that it is time to revisit the short side. There was just too much damage today in the market to believe that the July lows are going to be able to hold. They very well could as anything can and will happen in the market. However, today’s break was really ugly breaking below the 50 and 200 day moving averages of all indexes on heavy volume. Not only that but my long scans have been dominated by financial services – closed end funds since the rally started. That is almost never a long-term bullish sign. Even though there are a few strong stocks that still exist here and there it reminds me so much of how in 2000 there were a few leading stocks that were hitting new highs in the late summer before the September top. Most stocks hit their highs in March and never came close to returning but there were a few hold outs in the tech arena. We are seeing the same thing today as we saw then. The new short is a bit extended on the short term so I am not going to be getting too short this setup (it was an early short yesterday). There are many former leading stocks I am watching and when it is their time the charts will tell me when to get short–not my hopeful, fearful ego. I also have three early/extended/speculative possible shorts for some that want to push it on the downside here: KT NRG ROK. However, if you are going to press your bets by getting short early I would recommend using the 3x inverse ETFs like FAZ.
new short position: ROSE
ROSE is breaking down below the 200 day moving average, closing near the LOD, on very strong volume with BOP falling to a lower red level. Cut your final loss with a close above the 200 day moving average, if the stock does not move lower immediately.
