The overbought condition of stock prices offers an opportunity to replenish the bearish side of your portfolio. Not to mention that the further the market falls, this will allow you to buy strong stocks at cheaper prices. However, If you are overweight in bullish positions, you are doing a disservice by not diversifying. I'll be the first to admit that over the last several weeks, I have not been as diversified as I should. I have been trading multiple names in certain groups, and I have been over positioned in bullish trades; at one point by nearly 3:1. While I broke my personal rules in regards to diversification, the reason was simple. Opportunity. You know, opportunity is a risk if you don't take advantage of it.
On to the market...
"Down and down she goes, where she"ll stop...no one knows."
I think 1400 makes the most sense...
I did a little shopping this morning and here were a few ideas I came up with...
TSO- Refiners looking pretty ragged...
CMG- Been a good trade thus far...
WFR- Like it here...
CNH- Looking weak.
I still like the bearish ideas I threw into the watchlist: PSA, TSCO, ENR, AGN, ZMH, LNN, BOOM, VLO, MTB or ITG.
That's all I got for now.
