The Stock Market: Another Case Where You Have To Weigh The Evidence

Random Thoughts

The P’s and Quack ended higher but well off their best levels. So far, they still appear to be stalling in their recent retrace rally. See the MIM-when it doubt, take the chart out.

Once again, most sectors still remain in solid downtrends. There are few exceptions but nothing to get excited about just yet.

Bonds bounced a bit but they still remain in a serious downtrend.

Ditto for gold.

Other than a few aberrations in the sectors, the only positive that I see is that the Rusty had a massive up day and isn’t too far away from all-time highs.

As I often preach, I like to build a case and then look to tear it down. And right now, the evidence suggests that the market is still in trouble.

So far, the Ps and Quack remain set up as pullbacks. Therefore, again, if you don’t already have some shorts working, you might look to short the index ETFs until you do. Longer-term it’s hard to catch a trend in index shares (see my webcasts on efficiency) but shorter-term they can help to give you needed exposure.

So what do we do? Although Monday was an up day, not much has changed. The market rallied a bit but did stall basis the S&P and Nasdaq. Both still look poised to resume their recent slide. Therefore, continue to look to gain some exposure to the short side. Again, maybe look to establish a position in index ETFs while searching for individual issues. As usual, make sure you wait for entries and of course, honor your stops if triggered.

Futures are flat to soft pre-market.

Best of luck with your trading today!

Dave