Heavily Wrapped

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Bull be warned with price action coiled and ready to be unwound.

Multiple distribution days say funds are unloading. Friday’s mild sell off on heavy volume is a likely prelude to more downside.

Major indexes are decisively below their 50-day averages. Key, trend making sectors of Transportation ($TRAN) and Banks ($BKX) have followed suit.

BUT, it’s still a bullish scene with Retail ($RLX) and Biotech ($BTK) at highs.

That’s what it is.

 

 

 

Bear Wallop

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The Dow, S&P 500 and Nasdaq all received a severe walloping from the Bear.

Distribution under the 50-day averages confirms the bear bias we’ve held. Short ’em if you’ve got the stomach.

Best shorts will be under their 50-day MA’s, pattern of lower highs and clear institutional selling. Keep a tight leash.

Gettin’ Tight

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Price action on the major indexes is mostly hugging the 50-day averages as volatility contracts.

What gets tight eventually unravels. Perhaps we’ll consolidate before a new breakout. Perhaps we’ll see a new driven sell off.

Sell Bias remains intact until we see clear accumulation and leadership.

Top 42

Forty-two names hit our screen for superior technical and fundamental criteria. 

Some wash out from a week ago, though the Bull will be pleased to see some upside momentum taking place from this select list. More to come.

Symbol Company Chart
AAP Advance Auto Parts Inc N
ADS Alliance Data Sys Corp BO
AKRX Akorn Inc BASE
AMBA Ambarella Inc N
AVGO Avago Technologies Ltd BO
BIIB Biogen Idec Inc N
CAVM Cavium Inc HS
CNC Centene Corp N
CRM Salesforce.Com Inc N
CRTO Criteo SA Ads N
CVG Convergys Corp N
EIGI Endurance Intl Grp Hldgs N
EVHC Envision Healthcare Hldg N
FB Facebook Inc Cl A N
FLT Fleetcor Technologies N
GILD Gilead Sciences Inc N
GLW Corning Inc N
GPRO Gopro Inc Cl A N
HNT Health Net Inc BO
ICE Intercontinental Exch N
ILMN Illumina Inc N
JAZZ Jazz Pharmaceuticals Plc N
LCI Lannett Company Inc L-BASE
LNKD Linkedin Corp Class A BASE
MCK Mckesson Corp N
MNK Mallinckrodt Plc N
NXPI Nxp Semiconductors N V N
ODFL Old Dominion Fght Line N
PACW Pacwest Bancorp N
PANW Palo Alto Networks BASE
RDN Radian Group Inc N
RGLD Royal Gold Inc N
SFM Sprouts Farmers Market BASE
SKX Skechers U S A Inc Cl A N
SMCI Super Micro Computer Inc N
STOR Store Capital Corp N
TMO Thermo Fisher Scientific N
TSRA Tessera Technologies Inc N
UA Under Armour Inc Cl A BASE
VEEV Veeva Systems Inc Cl A N
VRNT Verint Systems Inc N
YY YY Inc Ads N

No Bull-ume

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Not much has come up to sway this blogger from being a Bear.

Yeah, we’ve rallied a bit. BUT, there’s little volume on the move, which equates to little conviction. Let’s call it a lack of Bull-ume. There – I said it. Bull-ume.

Just a week and half of trading till the month is over. Anything could happen, but it’s likely we’ll see more of a trend take shape as we move  through this key month of fund positioning.

Only open position here is long USO March 20 Calls. Still no durable bottom we can recognize. Though the technicals suggest we’re not likely far.

Breakdown City

Thirty-nine on our screen this week. Looks like breakdown city. Commentary post to follow:

Symbol Company Chart
AAP Advance Auto Parts Inc N
AKRX Akorn Inc BASE
AMBA Ambarella Inc N
AVGO Avago Technologies Ltd N
BIIB Biogen Idec Inc BASE
CAVM Cavium Inc N
CNC Centene Corp BASE
CRM Salesforce.Com Inc N
CRTO Criteo SA Ads BASE
CVG Convergys Corp N
CYH Community Health System N
EIGI Endurance Intl Grp Hldgs N
ESNT Essent Group Ltd N
EVHC Envision Healthcare Hldg N
FB Facebook Inc Cl A N
FLT Fleetcor Technologies N
GILD Gilead Sciences Inc N
GLW Corning Inc N
GPRO Gopro Inc Cl A N
GRUB Grubhub Inc N
HNT Health Net Inc N
ILMN Illumina Inc N
JAZZ Jazz Pharmaceuticals Plc N
LNKD Linkedin Corp Class A N
MCK Mckesson Corp N
MDVN Medivation Inc N
MNK Mallinckrodt Plc N
MSCC Microsemi Corp N
NXPI Nxp Semiconductors N V N
PANW Palo Alto Networks N
RDN Radian Group Inc N
SCSS Select Comfort Corp N
SFM Sprouts Farmers Market N
SKX Skechers U S A Inc Cl A N
SWKS Skyworks Solutions Inc BASE
TRAK DealerTrack Technologies N
TSM Taiwan Semiconductor Adr N
VEEV Veeva Systems Inc Cl A N
VRNT Verint Systems Inc N

The Reflex

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Reflex rallies on the major indexes had to be expected. The Dow posted accumulation, the Naz and S&P did not. Bear bias sticks.

Potential upside leadership in play the following Sector ETF’s trading decisively above their major MA’s:

  • XLP, Staples
  • XLV, Healthcare
  • XLU, Utilities
  • IBB, Biotech

The first three represent defensive positioning. But Biotechs are aggressive, a good gauge of sentiment, and a strong vote for the Bull’s cause.

Stay tuned.

Another Round

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More selling on the S&P 500, but not as heavy or as low as yesterday. We’re still bears.

Positions Update:

Shares in TWTR and WCIC were dumped for very small losses. That’s the only way to stay alive in this game. We’ll never be right all the time. No one is. The important thing is that we capitalize nicely when we’re right, and minimize any downside to our account. We could be right 50% of the time and still come out ahead with this.

USO, March Calls with a 20 Strike are still alive.

 

More Distribution

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Three distribution days in a row for the S&P 500 and this Bear train’s a rolling.

We’re looking for the major indexes  to take more attempts at regaining their 50-day averages. If we don’t see sell volume dry up we’ll be eying short candidates. Always best to be cautious with shorts.

We’ll be waiting for homebuilder Lennar (LEN)‘s earnings announcement tomorrow. It was KBH’s poor outlook that threw a wrench into the sector yesterday. LEN’s results will give us a better read on whether of not KBH’s problems with soft market spots is an industry wide problem. This blogger is more interested in price action than words. We alway look at “what is” before caring about “what should be.” So don’t care about the news as much as the reaction.

Stay safe.

 

 

Distribution Day

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The Bear continues to dominate with a clear distribution day under the major indexes’ 50-day MA’s. We’ll maintain our bear bias until the market proves otherwise.

Positions Update:

We got out of RYL after a key reversal on heavy volume. This didn’t appear to be news driven, which could mean A. it hit a  level some big fish wanted out at, or B. someone knows something we don’t. The point is we’re out with hardly any loss. This is the beauty of the stop loss. Get the fuck out when danger lurks. We can always re-enter, perhaps with better opportunity as a clear pivot point is put in with today’s high.