The last 2 weeks have seen an increase in distribution, and many stocks, including the major indexes, breaking support and major moving averages.

The market has clearly taken a bearish tone. Many companies reported blow out earnings recently, including AAPL and MSFT, and there was huge growth in GDP reported last week. But the market failed to rally on this news. In fact, it sold off. This is a very bearish market and it needs to be respected.

So if the market is bearish, why not short stocks? I don’t do well at shorting stocks, so I avoid it. If we get a rally, I may look to short stocks, but not now with the market oversold. If I were to look at shorting stocks, I would consider the gold stock ANV.

However, gold now sits at support and could bounce before moving lower.

I prefer to instead play the inverse ETF’s. If we see a low volume rally, I will look to play those and will my entries as they develop.

In the mean time, cash is the best position for now. Volume indicates that institutions are bailing out of stocks, so why buy? For me, new trades will be quick and move with the market.

Stocks to Watch on Market Strength:

I will post some charts of stocks that are holding up well, but they will not be automatic buys when they trigger. Rather, stocks to consider on market strength.



Good luck and good trading!