3 replies to this topic

[arbman]

The indices gap up for days, then sell, then try to stage an intraday rally and finally sell off within the last hour, this is really the definition of the slippery slope of hope.

Having said this, there is a divergence building up in the money flow and internals, if the indices do not accelerate lower today. There is another gap up in the futures at the moment, so this is getting very sad for the bulls who check the overnight futures and extrapolate it for the day. I would think a mild gap down and none stop rally would be the reversal, any gap up will be probably sold today immediately at this point...

Anyhow, what's really bullish is the sector line up for the short term. The inflation is selling, the liquidity is getting less evident from the market cap line up...

BUT, some of the growth has underperformed the decline yesterday. Because the indices are declining and making lower highs, I must look at the divergences in the leadership --just like I analyze the rallies the same way.

The banks are finally giving up after hanging in there for 3 years of rising rates. The long term rally is now getting mature and it is the time for the technology and industrials to take the turn more on a long term basis again. The consumer discretionary should be also coming out of favor with the financials. I think the energy and the materials will hang in there, but they should not substantially outperform...

So, the intermediate term health of the market on a trading range basis, at least, can not be sustained if the tech and industrials underperform the declines from here and it was the case partially yesterday. Otherwise, I will conclude that the last bit of inflationary liquidity went into the speculation by mistake...

http://ichart.finance.yahoo.com/z?s=^GSPC&t=5d&q=&l=off&z=l&c=^RMZ,^HHI,^XRH,^XSH,^HUI,^IRH,^OXH&.png

Finally, we must see one more day of large decline at least and the tech and industrials to liquidate this time for any IT sell off to stick, otherwise, I will cover intraday after the gap sells and look for the large cap tech and industrials for a high of the trading range and exercise any short selling ideas there again...

- kisa

[arbman]

So, the intermediate term health of the market on a trading range basis, at least, can not be sustained if the tech and industrials underperform the declines from here and it was the case partially yesterday.

I meant to say ... unless...

BTW, I expected this late June turn date about a few months ago, but narrowed it down to be before June 25 a few weeks ago. Specifically, I am looking for an acceleration phase in the first week of July until the end of the next month...

[jjc]

So, the intermediate term health of the market on a trading range basis, at least, can not be sustained if the tech and industrials underperform the declines from here and it was the case partially yesterday.

I meant to say ... unless...

BTW, I expected this late June turn date about a few months ago, but narrowed it down to be before June 25 a few weeks ago. Specifically, I am looking for an acceleration phase in the first week of July until the end of the next month...

Nice post kisa; good luck. Plan the work, work the plan.

[arbman]

jjc, I closed half of my shorts this morning and the remaining now. I want to think a bit more, I think the upside will have more potential in about one or two days. I want to see whether the market will stabilize or accelerate. This morning it sold off and rallied well, my cyclical sell strength is still around 82%, however a lot of stocks are near their supports, I expect the ratio to get near 50% tomorrow. If it doesn't, then I will think more about selling again...