IF you are pressing shorts today, or at the lows of the day you were most likely hurt. Why? Because we were extended to the downside (by a little) and the r:r favored shorting on a daily bounce vs. a short into the close with already being down two days.

$IWM is of course the most extended here, but could easily be due for a bounce back to the MAs and from there we can examine it to determine what the likely scenario is. I would not looking for a whole lot though, I think that the market weakness is here to stay, at least for the next few days. Entries/Exits matter.

$SPY has been trading lower but lagging the $IWM and because of this it is still above the 50 SMA (well barely not, I know) relative to the $IWM which is not. Similar to the $IWM, I do think we trade lower over the course of the next few days (at least) but a bounce now would not be bad in fact it would be greatly welcomed. Shorting on bounces seems like it could work now.

$XLF has been showing great signs of weakness lately and today it really confirmed that weakness. Closing definitively below the 50 SMA and some of the key components of it are really showing some weakness (ex. $GS, $MS, $BAC, $JPM). Overall, the banks are NOT the place to be right now. I would not be surprised if they were the first to trade higher on the next trend though. Rotation is the name of the game.

Metals ($GLD, $SLV) still look pretty ugly, I don’t think it is a wise idea to try to pick the bottoms, they will first need to level out and bounce and HOLD HIGHER before going long.

Apple ($AAPL) some people I am sure have suffered ALOT from buying Apple all the way down.. Why do they do this? Because they are using opinions over trends and when the trend changes, you must change as well. Apple has been weak for months now. Nothing really has changed in that sense and I do not think the bottom is in.

Amazon ($AMZN) had a disappointing day. Last week I was talking about how as long as we hold the $267 level we look good for higher prices. Amazon was showing relative strength and looked pretty good. Today it failed, however, that should not really come as a huge surprise because of the overall weakness in the markets.

Biotechs ($IBB) so far are still the strongest sector out there, because of this I would not recommend shorting this sector ($XLE, $SMH are much weaker). 

Similar tone to yesterday’s post in a sense that more time and information is needed and patient is required.  My plan is to short on a bounce as we are extended currently.

You can contact me via Twitter (@BENCBANKS) and the Contact Page on this website. Enjoy your evening.

 

4-18-2013 AMZN NOT DONE 4-18-2013 GS NOT DONE 4-18-2013 GS 4-18-2013 IWM NOT DONE 4-18-2013 SPY NOT DONE

What’s Weak/Strong – Daily Analysis