QQQQ showed weakness as it continues its weakness from yesterday with even the strongest tech stocks like aapl and rimm losing all of its gains from earlier today
IWM...illustrates how this breakdown from resistance is widespread, not isolated in SPX and QQQQ
XLF was the laggard and the reason for the weakness again. Not much news, just relative weakness and huge losses in some of their most shaky components, LEH + AIG
USO...oil rallied in the morning, then loosened up during the lunch hours, giving a nice pullback in the broad market. Oil bulls have something to celebrate today as it was able to close above its channel resistance finally...still needs continuation to confirm though
UUP...dollar was weak today...this makes sense with all that happened in the markets. I really can see how the dollar matters more to the market than oil...watchout if we break resistance as shorts will get killed...but if we breakdown like the markets today, bears can celebrate!
Analysis: Today's weakness in the markets was a nice surprise. I expected atleast a pause day before a close below major support, but i guess there is more fear in the market than i thought. With unremarkable volume today though, we should be cautious and not filling entire portfolios full of shorts...My positions are in favor of a weakening dollar, strengthening oil, and further selloffs in financials...As a chartest, i invest in what i see, and as of today's close, the charts are telling me that financials will lead the fall down as it seems to want to test its july lows and the dollar and oil will get a pullback as they are way overbought and oversold respectively. but i am also leaving much in cash still as i am slightly skeptical of all this bearishness. Just seems too perfect with such low volume. So i am expecting a pullback to the breakdown levels soon, maybe tomorrow. And if we can hold those levels and breakdown once more, but with stronger volume, with more committment from the bears, then i will load up with more short market, long commodity plays...
Game Plan: with enough invested at this present moment, i will just maintain my positions tomrorow. I will hold all positions unless major moves against my analysis is seen in oil, the dollar, or financials. I don't think its a bad idea to add to short positions tomorrow but i do think that we might be able to get a better price in a couple of days, especially if the asset in question has fallen hard these past 2 days...i just don't see the bulls turning over so quickly with so little resistance.
Long Sectors:
Agriculture (dollar weakening)
Commodities and Materials (dollar weakening)
Energy (oil finding a short term bottom and many inverse head and shoulder's patterns)
Short Sectors:
Tech (QQQQ breaking down and many of its stocks are showing same pattern off resistance)
Financials (fundamentally weakest + relative weakness in charts)
Casino / Gaming (weakness in China's market and weakening dollar)
Retailers (sales down and consumer confidence at lows...charts showing failure to break resistance)
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