The shit storm of sellers hasn’t quite passed as Wednesday’s distribution day now makes no. 3 in about a week’s worth of trading.
All of the major indexes and key sectors of retail, semiconductors and broker dealers are testing below their 50-day moving averages. How they bounce, hold or fold here means everything, and will tell us if we need to downshift our bias to Seller’s Edge.
Expect more volatility. The VIX says OEX traders are nervous. They might even get more nervous if we see more of a breakdown from key individual leadership names.
Let’s see how January plays out. Year after year whatever happens this month sets the tone for the year.
Aggressive money has already gone short.
Derretir Hasta! Spanish for melt up. It’s our way of saying again what we suggested last week.
The tech heavy Nasdaq is leading the charge north, as the S&P and Dow follow closely toward new high territory. But you know that.
Solid, upside participation from the leading tech stocks in the market, aka our Leadership, makes it really difficult to want to step up and place bets short for the a correction at this time. All the shorts really have, in our opinion, is the fact that the market will eventually revert to its averages, as it always does.
You can’t put a time on when corrections will happen. Well, maybe a Fibonacci analyst or astrologer would. But that’s not the focus here.
For now, up is the path of least resistance, as far as Growth Stock land is considered.
No one is surprised to see a fat, red distribution day to greet the weak.
Goldman has come out to the media as a bear. No telling how long they’ve been actual bears.
But interest rates are still low. The economy is looking strong. Traditionally bearish economists are now bullish.
But selling just feels right. We’ve gone without a real correction for months. Unusual.
Let’s wait. Watch for signs of the still resilient leadership to crumble here.
All is quiet on the the VIX front. OEX options traders are complacent. They can stay complacent for weeks. Though, inevitably, this measure of volatility is due to spike in the future, reflecting fear in the market as traders buy puts for security, as the cycle lives on again and again.
I won’t turn all out bearish until the semiconductors breakdown, which obviously isn’t happening as a new high is made here.
There’s rarely anything easy in this biz. Two days of distribution in the beginning days of 2014 has now been met with a flurry of buyers to mark an accumulation day. We’re now on watch for another melt up. Just – like – that.
Monday marked another distribution day for the major indexes. Sellers are in control. Odds are we’ll get another 50-day MA test. Growth stocks remain well bid in a continuing vote of confidence for the bull.
Heavy dose of selling to start 2014. Portfolio dressing is over. No reason for funds to buy top names to show they had em’ when they’re hot.
Right now it’s a matter of seeing where the funds will flow for this next few months. A trend best captured over weeks, not days.
First screen of the year, Top Growth Stocks listed by EPS ranking, all possessing RS values of at least 80. More on the pattern(s) here soon…
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