The market was unable to muster a bounce of even the slightest significance today, and more than a few of the “leaders” pummeled on Tuesday followed through to the downside, such as CTRP, MELI, VMW and FFIV. While a snapback of some sort seems logical, nothing says that this has to happen. Unless we get a move of such unmitigated power that it leaves no doubt the institutions are back to accumulating stocks, the focus in the near-term should be on the short side. Either that or one should be sitting in cash, waiting for a healthier market environment and hopefully enjoying the summer weather.
That being said, however, the evidence points to a further reduction of prices in the not too distant future; since it’s impossible to know just how far a market may fall or how it will go about doing so, it would be wise to stay alert and unencumbered by a bias or opinion on the matter. An embargo on all things market-related might not be all that bad an idea. The price/volume action of the market is and always will be one’s best counsel. Go beyond that and you run the risk of polluting your analysis with others’ opinions, skewing your judgment and subverting your own operations without even knowing it.
Potential targets for short sales: GOOG, GMCR, PCLN, AFL, V, F, AMZN, GS, BUCY, BIDU, AAPL, FSLR.
Disclosure: Long: SQQQ, SPXU, TZA; short: GMCR, AFL, V