With 30% below average volume, yesterday was analogous to watching paint dry. On the other hand, the technical action played out like the fiddler on the roof. The NDX did not surpass Friday’s picture perfect ‘Shooting Star’ and 50-DMA close. This action confirmed the break of the Broadening Wedge and provides verification of the, once potential – now confirmed, downward trend discussed Friday and yesterday (Pink).
This line (again pink) now becomes the market turning point for the short term trend. If breached, on a closing basis, our opinion of Bearishness will assuredly wane. If hedging is your only play (shorting the QQQ’s), yesterday was a textbook spot, considering the risk reward. For others, we believe many equities have been excessively bought and overvalued since the August 2010 lows. This is when investors should turn to seeking short opportunities.
I’ve outlined 15 of our top shorts, based on their current risk/reward ratio & technical pattern, within the NDX. Draw your lines carefully and you’ll see massive similarities with the major indicies.
(COST, FFIV, AAPL, XRAY, FISV, GOOG, INTC, LINTA, LLTC, MXIM, MYL, QCOM, SNDK, SIAL)
I hope this helps.