Sunday, August 7, 2011

Will we see a continued drop on Monday?

Last week I wrote, “Will we see a stock market rally next week?” Well it did rally briefly at the opening, but quickly turned down and into a mess.

With the downward slide all week see chart and the US debt rating down grade on Friday we have to wonder what might we see on Monday, but it will be here soon enough to see.

So what did I see in my weekend review?

IBD (Investor Business Daily) in their Current Outlook says: Market in Correction. 

No need to “interpret” Copernicus Systems this week. It is clearly guiding to sell or even to go short. I quote: “all systems across this website are now lined up emphatically negative--with vigor”

Copernicus Systems points to some an interesting selling divergence confirmations pointing to an even lower market in the future. 

I also found it interesting that a wise friend had earlier in the week pointed to a Dow Theory sell signal being generated; first with a non-confirmation between the Dow Transports and Dow Industrials generating a warning signal and then confirmation of a sell signal with the two falling together below previous lows.

Speaking of selling, I ended up selling both XLE and OIH last week after they zoomed past my downside sell points. .

I have not finished my determination as to what to do on Monday, but selling all of the stocks listed below seems possible and buying some protection such as SH and/or SDS to cover illiquid holdings and dividend stocks seems prudent.

SH is an inverse of the S & P 500 and SDS is a 2x-leveraged inverse of the same

Currently my "Stocks for a Trade" now consists of:
(All gains or losses shown are the total since purchase)

AMZN –6.39 %

BIDU  -2.70%

AAPL + 4.85%

ETF's for a trade are:


Have a great week!

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