The charts looked topish and leaders such as Apple Inc. and JP Morgan are breaking down. As Livermore said: "As the leader goes, so goes the entire market". Leaders are supposed to lead the market and if the trend of the market is down, the leaders stocks are supposed to lead the overall market lower. This is precisely why they are called "leaders". The winds are changing and one should get defensive and tighten your stops or moved to cash position. Aggressive shorts-sellers are already in the thick of action! Let's take a look my watch list.
Apple Inc. (AAPL) - Broke below its 50day MA.
Alcoa (AA) - Head & Shoulder reversal formation forming. A break of the neckline will definitely see more selling. Topish looking chart. Definitely a short-selling candidate. I have a post on AA too a few days back.
JP Morgan (JPM) - Broke and closed below the neckline of the double top formation. We might see more selling in coming week.Not looking good.
Citigroup (C) - Gap down on Thurs and broke the low of the hammer reversal candlestick and effectively rendering the reversal useless. Citigroup might look cheap now but as Jesse Livermore once said: "what's low does not mean it will not go lower" !
Bank of America (BAC) - Closed below $12 and dropped out of its consolidating trading range signaling weakness.If the selling is intensive, we might even see BAC retesting the $11 mark.
Direxion Financial Daily Bull (FAS) - Dropped out of its symmetrical formation. Not looking good..
Lastly, Dow Jones Index is consolidating for a breakout move. Check out this post on "Anatomy of a Short Sale". It is increasing looking like a late stage failure (as depicted in the post above) if the Dow do not move any higher or breakdown. My bias is now to the downside. Nonetheless, please wait for the market to show its hand before making your move! Traders would also be placing sell stops below the descending triangle.
Cash is king, for now!
Apple Inc. (AAPL) - Broke below its 50day MA.
Alcoa (AA) - Head & Shoulder reversal formation forming. A break of the neckline will definitely see more selling. Topish looking chart. Definitely a short-selling candidate. I have a post on AA too a few days back.
JP Morgan (JPM) - Broke and closed below the neckline of the double top formation. We might see more selling in coming week.Not looking good.
Citigroup (C) - Gap down on Thurs and broke the low of the hammer reversal candlestick and effectively rendering the reversal useless. Citigroup might look cheap now but as Jesse Livermore once said: "what's low does not mean it will not go lower" !
Bank of America (BAC) - Closed below $12 and dropped out of its consolidating trading range signaling weakness.If the selling is intensive, we might even see BAC retesting the $11 mark.
Direxion Financial Daily Bull (FAS) - Dropped out of its symmetrical formation. Not looking good..
Lastly, Dow Jones Index is consolidating for a breakout move. Check out this post on "Anatomy of a Short Sale". It is increasing looking like a late stage failure (as depicted in the post above) if the Dow do not move any higher or breakdown. My bias is now to the downside. Nonetheless, please wait for the market to show its hand before making your move! Traders would also be placing sell stops below the descending triangle.
Cash is king, for now!
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