Stock Market Remains in Correction
Futures were rattled on Sunday evening with the news of meltdowns at Japanese nuclear plants. As news about explosions rocking power plants panic selling began in the futures. The markets opened and upon opening buyers seemed to come out supporting the market like Friday’s session. Just as the market was getting going sellers took control pushing the market below Friday’s low. Not to be outdone, buyers began to come in through the day to keep prices falling further. The market did get a lift off the lows, but it appeared to be enemic buying as the volume run rate did not expand as prices came off the lows. We still remain in correction mode looking for shorts, but continue to be on alert for a new uptrend to form.
VMW stock jumped below its 200dma moving average on heavy volume signalling longs simply wanted out. A leader in cloud computing the stock has been under tremendous pressure as of late and looks to be heading lower. No one knows how low it will go, but the probability of VMW stock moving lower is high. Cloud computing still remains a growing sector in technology, but for now institutions are moving away from some notable names in the space. These stocks can come back and rally, but it is best to step aside and await for higher probability setups before jumping back in.
Shorting stocks is not for those who are new to this game. It is a difficult game to play and is proned to whipsaws leaving the trader sick to his stomach. For those who are not inclined to short, pay attention to stocks holding up during this downtrend. Those are the ones you will want to be long on the next uptrend. Perhaps these stock setup and move prior to uptrend is a signal for the stock itself, if the market direction begins to turn. Market direction is important, as these stocks hold up during a correction and the market direction turns…well, we’ll be on these stocks will you?
Tomorrow we get the ever important FOMC Rate Decision and the masses will be looking to whether or not we’ll see a new QE3 or QE2.5. Price action is much more indicative of future movements not your opinion. Economic news tomorrow we’ll see Empire Manfucturing and Import Prices which will be overshadowed by the FOMC. Ignore all the hype and focus on price action and the top stocks!
