There are no new short positions for Monday as there were barely any stocks down on the day on stronger volume. My two main short scans were quite dry despite the down day for the stock market. The reason for this is clearly the extremely low volume that we saw after the exciting sessions of Wednesday and Thursday. Still, even without the volume, Friday’s action was the furthest thing from a constructive pullback. The indexes were trying to hold in until the last half hour when the indexes decided to puke up what they were holding on to. After the damage of the past four days, stocks are a little extended on the short-term. A weak bounce will have many stocks setup in strong short patterns and I assume if this market continues to rollover we are only going to be getting more and more stocks setting up and breaking down from strong short patterns. We could also just go nowhere as the market waits for volume to return. That is also a real possibility. Overall, that is what the market is doing as you can find VERY FEW stocks that have had impressive runs to the upside or downside. This is definitely a very weak market but it hasn’t been able to get any real traction down. Now that earnings season is almost over, there will not be much more of an excuse the perma-bulls can come up with to hold the market up. The only thing that can save this market is heavy volume accumulation by the big boys that cause stocks to make real meaningful moves. Until the smart money is ready to buy, this is going to be either a very choppy or very bearish market environment. Cash is king for most individuals but if you are experienced it is probably time to be ready to pounce on the bear side if the next rally fails. No matter if the market stays choppy or gets ugly, I will be ready to get heavily long whenever the next time is the right time. I never get bored of this game, no matter how boring and lame the tape may get. I’ll be there when it is time to get back into the long side. I have three short positions subscribers could take. NRG doesn’t have a lot of room to hit its March 2009 lows but it is in a high reward/low risk short setup. CREE and VECO are extended and I would like to get short both on a low volume bounce and failure at the downtrending moving averages. However, if you don’t mind chasing a little bit you could technically take them now if you expect the market to really get ugly.
new short positions: none
none
