If you happened to see the short from yesterday (NCR) you will see that it has failed immediately. This is a clear sign that shorting the market is still not the right play. It did appear the market was ready to rollover but so many shorts are not working anymore that it is foolish to load up on anything. I will continue to keep all new shorts very small and obviously will continue to keep the ones I am adding to very small. Until this market comes under some further heavy volume selling, there is no way that you should bet against this market, even with the rally coming on lower volume. Never short a dull market…and this market is very dull.
new short positions: AMP WHQ
AMP is failing right at the 50 and 200 day moving average, on extremely strong volume. The stock appears to have put in a double top with the first top in July and the second top in October. You can see that there was way more distribution in the July top as the volume on the selloff was just nasty. The rally back to the October highs was on very low volume which was followed by heavy volume selling in November. Even though volume was lower than the first selloff, the distribution was still much heavier than the previous run-up. The RS line also failed to match the old highs in October with price, indicating that AMP was much weaker than the stock market overall. The rally off the lows in November has been on below average volume except on one day where the stock finished higher on the day but put in a bearish reversal off the highs leaving a shooting star pattern. The breakdown today was perfect off of both moving averages on stronger volume with BOP turning negative confirming the weakness. Cut your loss with a close above the 50 and 200 day moving average, if the stock does not move lower immediately.
WHQ is putting in a bearish reversal right near the death crossing 50 and 200 day moving average, on very strong volume. This stock clearly put in a top in October as it gapped lower on extremely strong volume with BOP going red. The weak close that day was the clue that a bounce was probably not going to happen. As the stock continued to selloff it did so on above average volume and with BOP staying red, confirming the weakness. The very weak rally off the lows in November have been on lower volume every day minus one day that was a lower close. Today’s tight inside candle bar might not look that bullish but considering that it came off the highs on such strong volume and the BOP went from yellow to red confirms that the weakness from the October top might already be returning. The RS line is also drifting lower and is showing a more bearish slope than the price action, which confirms the weakness of this stock to the overall market. Obviously, I would prefer for this stock to be failing right at the 50 and 200 day moving average but it is close enough that it should act as resistance even here. If it doesn’t the moving averages are not that far away and our cut loss is very clear. Cut your first loss with a close above the 50 day moving average and your final loss with a close above the 200 day moving average, if the stock does not move lower immediately.
adding to existing short position: BEN
BEN is failing near the downtrending 50 day moving average again, on below average volume. BEN has put in a double top with the first top in July and the second top in October. The first top was much more ugly as the distribution was huge and BOP went red into the August lows. After a low volume rally to the October highs, the stock rolled over again on another pick up in distribution. However, volume wasn’t as heavy this time indicating that the stock might hold the August lows and rally. Instead it didn’t and the stock on its rally try to the 50 and 200 day moving average was turned back in mid November on a very large one day of major distribution where BOP went red again. The stock has now tried once again to get back above the moving averages but if old sages hold true, “the third time should be the charm (mid Nov resistance failure, late November resistance failure, and Friday’s failure resistance).” Cut your first loss with a close above the 50 day moving average and your final loss with a close above the 200 day moving average, if the stock does not move lower immediately.
