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Resistance Proves too Much Stocks End Lower

|Includes: DIA, Netflix, Inc. (NFLX), QQQ, SPY, TECL, TECS, TVIX

Another shot at the 2600 level for the NASDAQ was denied even after a better than expected ISM Manufacturing figure. The market was expecting a contraction, but the index was able to hold on and show a little expansion. Bulls took over, but for only for a brief moment as sellers were once again hiding out at the 2600 level. Selling continued throughout the session. By the end of the day the major indexes were at their lows with small caps wounded badly. Volume did end lower on the day avoiding a day of distribution. Tomorrow’s job number was in focus giving an excuse for the selling. Price action appears to be stalling and churning despite avoiding distribution today the market still is heavy.

An interesting development in after-hours was the selling occurred in NFLX stock. Starz is pulling its movies and shows from NFLX. The news sent the stock lower by more than eight percent. Recently, this past leader had been under tremendous pressure. For those who still hold the stock it has been painful, but for those who have followed the price action you would have avoided the pain. Price and volume tell a story and if you are willing to listen you can avoid disasters like NFLX is undergoing.

Tomorrow at 8:30am EST we will see how many jobs August was able to create. So many are banking on a specific number and will adapt to what the number is. Guessing what a number may or may not be is simply gambling and provides you with VERY little edge. We prefer to have an edge, throw the probabilities in our favor. Using our proven stock market trading method we can be successful and extract money from the market.

September is notorious for big market drops and for market bottoms. Just last year on September 1st the market confirmed a new market rally. Not so much for this September 1st, but we still have a few weeks before the month is over. A big difference from this year to last are the amount of market leaders. Last September, NFLX had already broken out and a few other leaders were looking solid ready to breakout. Unfortunately, for this September we do not have the leadership setting up in solid price patterns. The very few who are setting up are gold related stocks. Not the type of leadership you want to see. There is a chance we can turn things around, but for now things are not looking good. Tread carefully.

Cut your losses!