Online Stock Trading | Longs beware; Stocks slide further on Sub-prime and consumer credit worries

Longs beware; Stocks slide further on Sub-prime and consumer credit worries


Filed Under Market Commentary |

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Today’s action is the reason why going long in this type of a market is pure gambling.  Credit fears will continue in this market, reasoning will always be overshadowed by emotion.  Its best to stand aside and let the market work itself out rather than trying to find “bargains.”  The stock market is not a department store where you can find things on sale. 

Market internals were quite bearish today.  Just 5 new highs on the NYSE and 11 on the NASDAQ, certainly not the beginings of a new bull market.  New lows on both exchanges were 430 and 125 respectively.  Breadth was 4 to 1 to the downside while volume lept higher on the NYSE but lagged on the NASDAQ.  It is not a surprise with the number of financials listed on the NYSE that it would see higher volume than what the NASDAQ would see. 

Be prepared for a short-term pop in the market.  As I write this, I did see futures were pointing towards a lower open.  However, the VIX failed to make a new high even with the CBOE total put/call ratio hitting 1.37 to end the day.  Look for a weak rally to sell out of positions, the downside to the ver near term looks very close.  Longer term the trend is decidely to the down side with the NYSE confirming this premise yesterday.

No need to be trading here, conditions are not right where odds are in our favor.  Lets wait for our ”edge” to return before we dive head first into this market.

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