We’ve seen bear markets before

We’ve seen bear markets before.

They drag on, torturing market players, setting up potential breakout buys that only collapse.

Subscribers to our Weekly Setups have watched two top-quality stocks breakout last week, but smart money isn’t buying because they’re only indicators.

If the stocks breakout and pick up momentum it could open the door for other stocks now setting up.

But if we begin to see breakout failures it’s just evidence that the bear is alive and well.

Friday’s heavy distribution is ominous.

We’re on the cusp of hoisting our Red Flag sell bias indicator, but are curious about this recent uptick with breakout candidates.

And its no coincidence that the breakouts occurred as key indexes test their 50-day averages.

These averages serve as tests of market strength, and come in play over an and over in good markets and bad.

Right now the heavy selling from the downward trending averages is telling us it wants to go down more.

If price action on the major indexes breaks down through the month-long trading range it’s established, and recent breakouts falter – it’s inviting short opportunities.

There’s nothing else to say or think about the matter, prepare to act accordingly.

And if the Bull emerges, which it’s known to do just when things look as bad as they do, keep an eye on the bellwether breakouts.

This week could be a pivotal one. Especially with Employment data out Friday.