Market Action Speaks For Itself
I have nothing to add from my
past few reports. The market action speaks for itself
and is speaking loud and clear. So far…and amazingly…the market is
ignoring sentiment readings that are calling
for at least a bounce. Maybe it bounces
today, maybe it doesn’t. My stance simply remains the same. Defense
is your best offense.
One word to the wise. Shorting has become TOO easy. My
e-mail subscription service is
littered with stocks that I put out as a short. I am usually happy
getting 10% and moving on. Right now, I am not
happy unless something drops 25%…and
we have a bunch of 25%ers…and more. This cannot continue…so go
slower on the short side. Yes, there are still
a bunch of short setups. It is
just my contention that when things get too easy…either way…it is
getting closer to a possible turn. Please keep
in mind, any bounce is sellable
at this juncture and will only set up shorts at a lower-risk juncture.
Now…let’s revisit how bad things have become. On
May 20, I put out 40 short
setups for you to review. I put them out because the Nasdaq had just
rallied over 10% in a week. All weekend, the
skilletheads on Wall Street called for the bottom: “This is the
bottom!” Yeah right! Well, after going through the charts, I saw something
completely different…in fact, the exact opposite.
After reviewing the stocks on 6/4, 38 of 40 were down by
an average of 16.3%. Fast
forward to today. Thirty-nine of 40 are now down…and by 30.8%. Yes,
30.8%. And Joe Battipaglia still calls this a
correction. I am telling you about
this again so you can do some homework. There was no way of me knowing
that things would get this bad…but it was
easy to tell that the market was still
in trouble. The more stocks that set up badly, the worse things could
get…and things were setting up badly. Please
take an hour of your time to review
what I saw. I have twice. It is the study of past winners as well as
losers that help us interpret the future.