The wave of anti-government demonstrations moved is way into Libya over the weekend causing havoc amongst equity markets. Even better than expected Consumer Confidence figures as well as Richmond Fed Manufacturing couldn’t entice buyers to prop up the market. Heavy volume sellers were in our stock market leaders today showing institutions were dumping stocks, the best performers. Today, the market went into correction mode with a big percentage decline on higher volume. When the likes of NFLX stock are AAPL stock taking beatings you must stand up and take notice. While no one knows if we truly have seen the top the signs are pointing to a great possibility we may be entering into a bigger than normal correction.
The uptrend beginning on September the first of 2010 is officially over. We could see the market rebound over the next few days, but today’s action amongst the market leaders highlights the fragile state this market is in at the moment. Bulls will argue today was a buying opportunity and others will say we are in need of a correction the fact of the matter is raising cash and going on the sidelines isn’t a bad place to go. Wait out the storm and let the charts setup again to go long. However, if you are inclined to go short we are actively on the prowl to see if we do see shorts setup.
For a few months now Doug Kass has been trying to catch the top of the market. He may have done so this time, but he has been wrong since November missing out on gains. But, now, we have the likes of ORCL reversing hard, AAPL sitting on top of its 50dma, CRM through its 50dma, an the hits just keep on coming. HPQ stock is down more than 10% in after-hours trading after it disappointed the street. Needless to say, this will put more pressure on the markets tomorrow. On the bright side HLF posted better than expected earnings, but remind you HLF is exception to the rule and not the rule.
Defense wins championships and it allows you to keep your capital to fight another day.
