July 16, 2010

Markets sold off thru wide pivots on > avg volume. Poor economic releases (consumer sentiment) and good (if questionable) earnings from BAC, C, GOOG. Hard to know if profit-taking or position-settling before the weekend or aggressive short-selling drove the markets down — but the underlying technicals don’t show quite the same deterioration as one would expect looking at the 2-3% overall losses. Almost as if the markets needed to hit an air pocket before they try again to get through resistance. That said, shorting into strength (esp if its low volume or narrow breadth) is now what the indicators are saying will work.

Short-term: 3 yellow, 1 red – tending yellow
Intermediate-term: 2 yellow, 2 red – tending yellow/red
Stock targets: 12% swimming, 24% neutral, 63% sinking

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