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Post Market Analysis, Tuesday December 8: Bearish

|Includes: DIA, GLD, IWM, QQQ, SPDR S&P 500 Trust ETF (SPY), SPY, UUP, XLF

 Stocks sold off hard for a few reasons today. Retail Sales numbers were pretty bleak this morning. Gold crashed almost 2% today. Also, the dollar popped .5%. The Nasdaq (QQQQ), Russell 2000 (NYSEARCA:IWM), and financials (NYSEARCA:XLF), which are leading indexes, showed relative strength when compared to the S&P 500 (NYSEARCA:SPY) and Dow Jones Industrial Average (NYSEARCA:DIA). This takes away from the bear case.

The TRIN was incredibly bearish today, but the TRIN/Q (the TRIN reading for the Nasdaq) stayed in bullish territory for most of the day. The VIX shot up 7% today which definitely confirms the move lower by showing an increase in fear among options traders.


Remember, one day does not make a trend. Before I consider going short this market again, I am looking for SPY to close below 108 and the S&P 500 (SPX) to close below 1075. However, even then I will not expect a reversal in this up trend we have seen since march. I will only consider it a down leg until we put in a lower swing low. I have been repeating myself for the past few weeks in saying that this market is currently very difficult for a swing trader to trade. Day traders should have enjoyed the past few weeks thoroughly as we are seeing a lot of big moves intraday. On the broader time frame, however, we have seen choppy sideways consolidation action the past few weeks... I hope I made myself clear. I am still sitting on my hands.

Thanks for being a part of! Always trade with a stop loss and manage your risk appropriately.

Happy Trading,