Thursday was the type of reversal day you don't like to see at inflection points. The market opened higher, but was sold off into the afternoon and we ended with broad, but not deep losses.

Looking at the futures this morning, to me it is presenting a picture of weakness. I am not making too much of it yet, but it definitely has my attention.

Dollar futures breaking sharply higher this morning:

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Crude oil futures breaking support at $92

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Gold futures off again, looking like they may be headed for a new low

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Dow minis back under 14K

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Note the "megaphone" pattern developing on the Dow minis. That makes me a little uneasy, as it suggests a topping action with increasing price spread; also note the increased volume of contracts traded within that range. Monday's low of 13,784 on the Dow, or 13,746 on the contract, is important short term support in my view. Let's see what today's trading brings.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Here is a chart of the hugely popular NASDAQ 100 tracking ETF, which is actually in negative territory year to date. Anyone long position opened on the first trading day of 2013 would be under water at this point.

The market rally that started on New Year's Eve has attracted a good deal of attention, and deservedly so but - largely due to the breakdown in Apple shares - the NDX and its tracker QQQ have been left behind.

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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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Time will tell if this divergence turns out to portend weakness for the stock market. I will be keeping an eye on it.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Since then we've had quite a bit of churn in the market, with the SPX mostly moving sideways, with a slight upward bias. However market internals have been weakening, we've seen some industry groups show cracks, and there has been a somewhat defensive rotation. Friday (Feb. 8th) the SPX made a new high for the move on lighter volume, after the dollar index popped higher, and T-bond yields pulled back.

My read is that it's probably time to take some money off the table. The plan is to look for a good point Monday to sell out of half the position (unless I see trading action to change my mind). What I expect is a move up at the open and a lower close. We'll see how it goes.

(click to enlarge) In other areas of the market, here is what I am seeing:

• After last week's sharp move up, the dollar index closed right on its 200 day EMA. If it can stay above that mark, look for a run toward 81.50.
• The 10 year T-note is back under 2%, which seems to be a resistance level; the long bond is finding resistance at 3.2%. There has been ongoing negativity toward bonds, but prices may have found a short term floor. Long suffering bond shorts who finally got onto the right side of the trade may want to think about banking those gains.
• There is a bit of divergence in the Dow; the transports followed most of the major indices in making a new high Friday, but the industrials did not.
• We have a recent bearish 50/200 day EMA cross on gold. The metal repeatedly challenged those levels last week, and failed to close above either of them on any trading day.

For trading positions, here are a few items that are attracting my attention:

1. Allstate (ALL) has made a nice 33% run since mid November. It looks toppy.
2. Amazon (AMZN) is back near support at $260. If it bounces here, there may be a trade on the long side, but if $260 doesn't hold, look for more downside ahead.
3. Conoco Phillips (COP), a stock I have traded successfully in the past, is looking attractive again.
4. Devon Energy (DVN) is a stock on the move, having put in a series of strong up days on big volume. It is a little extended in the very short term, but this one is worth another look.
5. We've had a good run with Pfizer (PFE), but it looks like time to say farewell for now; the shares were looking tired over the last couple of weeks, and broke the 200 day EMA with increasing volume in the last two trading sessions.
6. Wal Mart (WMT) is quietly building a good looking base. If the stock closes above $72.50 it should have decent upside. This one isn't going to be a rocket ship, but there still may be a solid trade in it.

That's it for this weekend, good luck and happy trading everyone.

Disclosure: I am long [[PFE]].

We'll see how this plays out through the afternoon, but at this point it has the look of a reversal day. That hardly comes as a surprise; I have been publicly anticipating the possibility of an imminent correction in my Seeking Alpha weekly articles.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Trading with Harry follows and documents two separate ETF investment strategies implemented by the author in separate real money accounts. One is a quantitative, rules-driven asset class rotation model, based on momentum across multiple time frames. The other is a S&P 500 strategy based on my overall outlook on the index.

Readers can find more detailed explanations of each at the linked page, along with important disclaimers. It is my hope that this information will be of some value. I wish everyone happiness, peace and prosperity in 2013 and beyond.

With Warm Regards

Harry Fotopoulos

"The Simple Accountant"