Market experienced a good dose of distribution today. But it was still less than 300 breakdowns to the downside day. this puts the 2 scenarios in play out of the three I highlighted on the weekend: sideways range or breakdown. Another 200 plus day to the downside will get the breakdown scenario in play.
Market has had a persistent bid in last few months, so the question is will the market go down without fight. Will the bulls put up a fight. Will the dip buyers show up. We will know by the end of this week.
At this stage obviously the focus will be on the Stockbee Short scans. The mix of scans will give good set of opportunities if we get confirmation on Market Monitor. At this stage most shorts are at top of range. They are possible breakdown moves at top of their range. The Stockbee Dollar breakdown scan is full of them today. Some of these will setup for second leg down if the correction continues and those are the ones that i am interested in. Stocks breaking down at top of range can often end up forming range instead of going down immediately. So I like looking for second leg down after the first break.
At the same time I will continue to focus on EP bullish and STIB as they can still offer some ideas. Most EP during such periods go sideways post breakout.
Also during such sideways range period or correction period many future leaders setup . They do not correct much and go in to orderly ranges or pullbacks. Once the weight of the market is lifted they spring back quickly.
Stocks with high TI ratings that form orderly pullbacks is something to watch for during such periods. They offer excellent opportunities once selling period gets over. Many of them breakout even before overall market turns the tide.