One thing we addressed recently is the probability of U.S markets following the developments, market action abroad. If you had this in the back of your mind, you'd see the indicies here had a good chance of another -5% day as that's where the $TOP (U.K) headed after the huge and a very unexpected 1.5% cut. The market there declined gradually all day after the rate announcement and after it's close the idea of a selling wave extending here was a high probability.
The drop on top of Wednesday's drop put the market on life support at SPX 900 after easily breaking the 930 area of interest. It's a good thing we've been positioned away from what became a -100 SPX in 2 days and another good thing is how fast it occurred. That's right, if we're going to go higher anytime soon and break over 1000 SPX, this is the way to do it. Back up the train and load up the cargo and head North!. If the market shakes off the job report and retail numbers, it will be a very good sign. We're not suggesting grabbing the first train, we' re going to monitor till close and if the action is good, we'd probably buy (SPY/SSO/SSD short) to hold over the weekend in anticipation of something greater come Monday. On the other hand, if we crack 900 hard, we're going into coma with the market. We'll give an alert today, if our general tone changes from Tuesday.
If you did this trade , you're probably covered and already gone for the weekend....lol...enjoy, just bring us back a gift!.."...your trading prospects to the downside now. The odds are bigger returns would be downside bets. This prospect was only enhanced after viewing some lists more closely after the close and seeing some bloated and undeserved point gains that may be crying for a short. This includes the high betas, MA, BIDU, GOOG ( also, we weren`t overly joyous with the AAPL, RIMM performance), and any solar sector noted in alert, especially the FSLR, SPWRA. The list also includes anything oil related stocks, including the E&P gas stocks because Oil is not going up 10% a day going forward. The ETF`s here are OIH, TAN."
As far as individual stories, we've pointed out the stocks of interest this week, when we say we'd buying on dips we are not talking about solars or anything else. We're talking about names we are putting up here. A good case was CMP today as it smacked the 9EMA and rushed up 5 pts opposite of the weakening market.