No Santa rally this year

No Santa rally this year

December 18, 2006

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.