Today we saw selling that was broad-based, but not particularly heavy in terms of volume. The sector overview looks more bearish here, with several indexes and sectors sitting on trendlines or other forms of support.
An example is SPY. A break tomorrow below today's low will have me shorting more aggressively.
- USO: Trying to find a bottom here?
Looking at the one day charts for USO, IWM, SPY, and QQQQ side-by-side, it appears oil is having a smaller impact on broader equity prices. Perhaps the market is getting ready for a bounce in oil prices, or alternatively waiting to see oil break support.
- DBC is composed of futures in crude oil, heating oil, gold, aluminum, corn and wheat. It is sitting on support here.
- XHB: If commodities move higher it may put pressure on consumer sectors. Then again, maybe XHB will break below its trendline regardless, in which case I'll be shorting homebuilders.
The major indexes could rebound off of support here. Even so, I'm sensing the market is getting ready to move broadly lower, and perhaps in a big way. Financials could lead the way down, considering the continued dismal news flow that shows no signs of abating. Still, I covered most of my financial shorts near the end of day today. If XLF drops below last Thursday's low, I'll start adding short exposure again.
For instance, BBT:
- WB: I will be adding to my short position below 14.70.
- CLB is looking precarious here.
- PWR: I still like this one long.
- TJX: I have a small long position, and will look to add if the consumer sectors rally.
- RAI: Looks like a good short entry here, under significant resistance.
- WST: I restarted a small long position near end of day today. My stop is under today's low. Pharmaceuticals.
- TAM: Brazilian airline. Already short this one.
- CAL is sitting under resistance and may be a good short opportunity if oil prices bounce.
We have the Producer Price Index before market open. Cash seems like a good position here until the market moves either up or down with more conviction.
