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Post Market Analysis, Thursday February 4: Extremely Bearish

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

 The markets sold off HUGE today, closing on the lows. Volume was very strong, which adds serious conviction to the sell off. The TRIN was almost overly bearish, but the TRIN/Q gave a healthy bearish reading. The VIX popped nearly 21% today, closing well above 25. Gold (NYSEARCA:GLD) sold off about 4% and the dollar rose .65%.

The S&P 500 (NYSEARCA:SPY) broke down below key support at 109, 108, and 107.2... in one swift move. If SPY stays under 107.2, it's game on for the bears. The next key support is going to be 105 and 103.7. There is a lot of room to the downside now and a lot of resistance to fight through on the way back up.

Thanks for being a part of! Always trade with a stop loss and manage your risk appropriately. As a trader, you should be able to make money in either direction. Therefore, a strong sell off like this should not scare you (at least on a trading level); instead, you should be happy to see so much movement. If you do not know how to short or are uncomfortable shorting, then move into cash or buy some short term government securities. Please do not hold a loser. Right now, most stocks are looking like losers.


Happy Trading,