Faltering Thursday (Again) – Another Week Of Market Weakness

These are not happy charts:

The Nasdaq and Russell have gone from Spitting to Vomiting Cobra patterns, with 10% drops certainly looking like they are in the cards as things play out. The Dow, S&P and NYSE are still putting on brave faces but, since we are coming into the end of Q1, we have to assume there’s a window-dressing factor to keeping up appearances.  

In our Futures Trading Seminars–and we have a big, live one coming next Tuesday (register for HERE)–we teach our Members to short the laggards when 2 of 3 or 3 of 5 of the contracts they are watching cross.  Well, here we have a similar opportunity with the slower-moving indexes as the Nasdaq may confirm a downtrend by crossing its 25% line at 4,125 and the Russell will back that up by failing its 15% line at 1,150.  If so, you can short the laggard (we already shorted the Russell, of course – it was our key short all month!), most likely the Dow.

 

In fact, had IBM not popped 10 points in the past week, the Dow would already be 100 points lower, so it’s a wonderful way to play catch-up at 16,269. Again, our Members are already up $750 per contract shorting the Dow, as our first call of the morning in yesterday’s Member Chat Room (8:34 am) was:

Durable Goods orders were not good.  Hard to blame the weather on that one but I’m sure they will.  

Dow 16,350 (/YM) is the best shorting line confirmed by /ES 1,865, /NQ 3,640 and /TF 1,180 – all still over so far.  Oil $99.65 is a no short ahead of inventories, gold $1,312, Dollar 80.19.  Siver $20.025, copper $2.9865, nat gas $4.39 and gasoline $2.89 and don’t forget we expect a build in gasoline and distillates due to the ship channel closed but maybe a big draw in oil for the same reason.  

[Chart by Dave Fry]

Keep in mind that the Futures don’t exactly coincide with the indexes and that we took the money and ran at the day’s end but, this morning, we’re at 16,200 on the Dow Futures and, at $5 per point, per contract, that’s a $750 per contract gain in 24 hours!  S&P Futures are at 1,845 and those pay $50 per point, per contact for a $1,000 per contract gain.