Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Market Drop Brings Out the Yellow Flag

By

With the market losing the first area of support, new short setups are starting to percolate and offer opportunity.

PrintPRINT
The market seems to be getting quite thin, meaning that the opportunities for solid setups are becoming harder to find. Whenever this transpires it indicates to me that we're going to enter a phase of consolidation or retracement. This is not necessarily a bearish activity, but rather a resetting of the current trend, allowing us more data to analyze in order to determine if, in fact, the run can continue, or if a new trend lower is upon us. A few days ago I pointed out levels in the Dow that should be observed, the first being 13,055. Yesterday this was breached on a closing basis which is an uber-short-term win for the bears. The next level which is higher in importance is 12,953, or the low of the power move from March 13. Should this be taken out it would indicate a failure on the part of this most recent advance and give bears ammo to attach even further support levels found below around 12,734. For now the breach raises a yellow flag and a time to pause while we wait to see how the action plays out.

While the yellow flag is risen, there is little in the way of solid setups, and today I come in with more short than long watching Genuine Parts (GPC), Ecolab (ECL), and Oil States International (OIS) as possible trade candidates. Each look to be breaking down from short-term consolidation patterns, and with stops above, may be ripe for swing trades to the downside.
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely refle= cts the analysis of or opinion about the performance of securities and fina= ncial markets by the writers whose articles appear on the site. The views e= xpressed by the writers are not necessarily the views of Minyanville Media,= Inc. or members of its management. Nothing contained on the website is int= ended to constitute a recommendation or advice addressed to an individual i= nvestor or category of investors to purchase, sell or hold any security, or= to take any action with respect to the prospective movement of the securit= ies markets or to solicit the purchase or sale of any security. Any investm= ent decisions must be made by the reader either individually or in consulta= tion with his or her investment professional. Minyanville writers and staff= may trade or hold positions in securities that are discussed in articles a= ppearing on the website. Writers of articles are required to disclose wheth= er they have a position in any stock or fund discussed in an article, but a= re not permitted to disclose the size or direction of the position. Nothing= on this website is intended to solicit business of any kind for a writer&#= 39;s business or fund. Minyanville management and staff as well as contribu= ting writers will not respond to emails or other communications requesting = investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
<= /p>

 

PrintPRINT

Busy? Subscribe to our free newsletter!

Submit
 

WHAT'S POPULAR IN THE VILLE