A heavy whacking of stocks was a great endorsement for our Sell Bias.
We took the opportunity to cover some of our short positions amidst the rush of the steepest one-day losses on the major indexes since 1987.
We’re not so sure how much selling pressure remains as the indexes rebounded sharply from their 200-day averages.
What many are attributing to a “trading error”, with rumor of a major firming hitting the $B rather than $M amount, may just be a accidental blip in the bigger chart pattern picture.
But it’s long been our opinion that many funds have been waiting for an opportunity to lock-in gains with sell-stop orders, not matter how hard and fast they were hit. This massive bull leg has seen little in the way of corrections until today.
Our game-plan now is to play defense and wait for the market to show us discernible odds before adding positions – long or short.
Good news for growth stock buyers is our list of potential breakouts was little damaged today.
Stay tuned for our weekly analysis.