It is certainly not pretty out there. This is the start of correction many were waiting for. Even though the selling was concentrated in few sectors, it will soon spread to more sectors and more stocks. High volume declines, range expansion to bearish side, and bearish breakouts exceeding bullish breakout. This is clear distribution.
The safest place is cash currently. Attempts at squeezing the market upwards will persist , but when you see action like this, any further commitment on long side is extremely risky. At least I am not going to put my hard earned profit at risk at this stage. At some stage the market will set itself up for up action again, but the mojo is gone. Forget about Santa rally.
Stocks breaking down or experiencing correction. Go through this list, that is clear distribution.
ACI,Arch Coal Inc (Google Yahoo Earnings BW Chart)
AGIX,Atherogenics Inc (Google Yahoo Earnings BW Chart)
AIR,Aar Corp (Google Yahoo Earnings BW Chart)
ALJ,Alon USA Energy Inc (Google Yahoo Earnings BW Chart)
AMSC,American Superconductor (Google Yahoo Earnings BW Chart)
ASGN,On Assignment Inc (Google Yahoo Earnings BW Chart)
BRKR,Bruker Biosciences Corp (Google Yahoo Earnings BW Chart)
BTJ,Bolt Technology Corp (Google Yahoo Earnings BW Chart)
CHDX,Chindex International Inc (Google Yahoo Earnings BW Chart)
CMCO,Columbus Mckinnon Cp(Ny) (Google Yahoo Earnings BW Chart)
COGT,Cogent Systems (Google Yahoo Earnings BW Chart)
CPE,Callon Petroleum Co (Google Yahoo Earnings BW Chart)
DPTR,Delta Petroleum Corp (Google Yahoo Earnings BW Chart)
DWSN,Dawson Geophysical Co (Google Yahoo Earnings BW Chart)
EAC,Encore Acquisition (Google Yahoo Earnings BW Chart)
ECA,Encana Corporation (Google Yahoo Earnings BW Chart)
EMBT,Embarcadero Technologies (Google Yahoo Earnings BW Chart)
FTO,Frontier Oil Corp (Google Yahoo Earnings BW Chart)
GGR,Geoglobal Resources Inc (Google Yahoo Earnings BW Chart)
GIII,G-III Apparel Group Ltd (Google Yahoo Earnings BW Chart)
GOOG,Google (Google Yahoo Earnings BW Chart)
GRP,Grant Prideco Inc (Google Yahoo Earnings BW Chart)
HERO,Hercules Offshore Inc (Google Yahoo Earnings BW Chart)
HES,Hess Corp (Google Yahoo Earnings BW Chart)
HHGP,Hudson Highland Grp Inc W/i (Google Yahoo Earnings BW Chart)
HOC,Holly Corp (Google Yahoo Earnings BW Chart)
ICFI,Ifc International Inc (Google Yahoo Earnings BW Chart)
KELYA,Kelly Services Cl A (Google Yahoo Earnings BW Chart)
KNDL,Kendle Internat Inc (Google Yahoo Earnings BW Chart)
KWK,Quicksilver Resources (Google Yahoo Earnings BW Chart)
LLL,L-3 Communications Hldgs (Google Yahoo Earnings BW Chart)
LWAY,Lifeway Foods Inc (Google Yahoo Earnings BW Chart)
MATR,Matria Healthcare Inc (Google Yahoo Earnings BW Chart)
MFB,Maidenform Inc (Google Yahoo Earnings BW Chart)
MFRI,Mfri Inc (Google Yahoo Earnings BW Chart)
MIKR,Mikron Infrared Inc (Google Yahoo Earnings BW Chart)
NBL,Noble Energy Inc (Google Yahoo Earnings BW Chart)
NOV,National Oilwell Varco Inc (Google Yahoo Earnings BW Chart)
NTG,Natco Group Incorporated (Google Yahoo Earnings BW Chart)
NVEC,Nve Corp (Google Yahoo Earnings BW Chart)
OIH,HOLDRS Oil Service ETF (Google Yahoo Earnings BW Chart)
OMNI,Omni Energy Services Cp (Google Yahoo Earnings BW Chart)
ONXX,Onyx Pharmaceuticals Inc (Google Yahoo Earnings BW Chart)
OSIR,Osiris Therapeutics Inc (Google Yahoo Earnings BW Chart)
OSTK,Overstock.com Inc (Google Yahoo Earnings BW Chart)
POWI,Power Integrations Inc (Google Yahoo Earnings BW Chart)
PRFT,Perficient Inc (Google Yahoo Earnings BW Chart)
RDC,Rowan Companies Inc (Google Yahoo Earnings BW Chart)
REDF,Rediff.Com India Ltd Ads (Google Yahoo Earnings BW Chart)
RMKR,Rainmaker Systems Inc (Google Yahoo Earnings BW Chart)
SMSC,Standard Microsystems Cp (Google Yahoo Earnings BW Chart)
SUN,Sunoco Inc (Google Yahoo Earnings BW Chart)
SWN,Southwestern Energy Co (Google Yahoo Earnings BW Chart)
SYX,Systemax Inc (Google Yahoo Earnings BW Chart)
THE,Todco (Google Yahoo Earnings BW Chart)
TSO,Tesoro Corp (Google Yahoo Earnings BW Chart)
TTI,Tetra Technologies Inc (Google Yahoo Earnings BW Chart)
VCI,Valassis Communications (Google Yahoo Earnings BW Chart)
WNR,Western Refining Inc (Google Yahoo Earnings BW Chart)
WTI,W & T Offshore (Google Yahoo Earnings BW Chart)
As I said in the morning, several things indicated this. How long the correction will last, I have no idea, but all that I know is there will be more opportunities on the long side in 2007 and when the risk is low and opportunities are compelling on long side, I will load up the truck again on long side. Till then it is R&D times.
Santa seems to have liking for short sellers this season.
4 comments:
there's a lot of oil and energy on that list...
wonder what crude will do? and if some of these more "crude-dependent" stocks will diverge or converge with it...
This will spread to other sectors. Just keep list of overextended stocks or stocks which had rallied meekly, you should have lot of opportunities on short side.
As usual, there will be attempt to squeeze shorts, but I see rallies in some sectors have seen the best of time. The risk reward equation favors short side.
I strongly disagree as far as QQQQ and most NASDAQ stocks are concerned. Today was just nervous short term selling ahead of PPI (tom) and Crude Inventories (Wed). I actually witnessed the distribution in the latter half of Friday's trading so today was no surprise. It is likely that the longer term swing traders that have been bidding this market will support once again. We've been getting these emotional and speculative selloffs right before economic numbers quite often recently.
Besides, what is the risk that the PPI will surprise to the inflationary side? Have commodity prices been surging lately?
My plan is to play the last bit of downward momo but to focus more on identifying dips to buy.
nice breakout with volume on PENN on the long side...
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