As you all know, we had sectors that were in their private bear markets...
REITs, banks, most of the financials, transports , home builders, you can even include utilities as far as long term trend structures any concern
over the intermediate term time frame, it is crystal clear that these sectors are still leading the broad market on the down side.
following charts were posted on xtrends right before these sectors topped out at the obvious trend line setups in early september.
Now if you go to your daily charts and check what happened after that, you will see that all these sectors topped out long before Nasdaq Composite did. Because Nasdaq has the least exposure to these sectors...
You will see many confirmations from momentum, internals , volatility/implied volatility breakouts and options+sentiment polls.... I will not elaborate them because they are all product of these trend structures.
Now $64B question is whether this pull back is just another swing move or it is that long waited +20% plunge
In my opinion this is the big one that may take SPX as low as 1320 level but I believe ultimate top of this bull market is not in...
I have shorted all these sectors via ETFs and individual stocks at the peaks ... My final shorts were Nasdaq and Russell2K as well as crude oil as stated on Thursday. I am also bearish on Gold but no short position yet.
Aside from the individual sectors that are leading the market down, I think the best opportunities on the downside will immediately come from emerging markets. I have no position on them yet but I am considering shorts on several bloated markets next week.
Edited by A-ha, 20 October 2007 - 11:09 AM.