The Market Is Rocking Everyone To Sleep

I feel like this market is rocking everyone to sleep with sweet lullabies while its taking many so call “momo and leading stocks” to the wood shed.  I believe many are turning a blind eye at some of the subtle changes that are happening underneath the surface which has been the right thing to do for a long time.  However, I believe that these subtle changes are not as subtle anymore and are happening more frequently.  Recently it seems like the momentum names are getting smoked once a week every week.  As of right now $FB $YELP $TRLA $PRLB $SCTY $LNKD $TSLA $Z are all below their 50 day moving average.

Some might say–look we have rotation going on, and that might be the case.  But, on 10/1/2013 the Nasdaq closed at 3817.98 and 69% of all stocks were trading above their 20 day moving average, on 10/22/13 the Nasdaq closed at 3929.57 and 80% of stocks were trading above their 20 day moving average,  Friday we closed at 3991.65 and 62% of stocks were trading above their 20 day.  The NYSE new high-new low/10 (10day ma) stood at 143.8 on 10/1, at 227.60 on 10/22 and at 143.80 on Friday.  Either we are rotating or not rotating or the rotation is not keeping up.

The only reason why I bring this up today is because I believe this is actionable in the short term.  We all know we have had a market that has ignored all negative divergences known to mankind but every now and then when it has become to blatant it has been actionable.  I would look at $DIA $SPY $QQQ $XIV and the 2x 3x etfs and take a short bet with a defined physical stop.


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