Fire is Born From Wood, But Then Devours Its Parents

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Rig Veda Quote

The warning phase is accelerating, but going short now that the McLellan Oscillator is approaching oversold, looks better in theory since one blip up can bring in buyers for a bounce into overhead resistance.

Concerning sectors and groups, some had already given the signal to go short when the indices were making new highs, such as Retail and Oil Services. Others signaled warning earlier this week like Financials and Semiconductors.

We have turned to certain soft commodities and sectors that were beat up coming into this year and now are bottoming out.

Otherwise, we are happy with the almighty greenback even if the rates are basically zero. Zero sounds better than minus zero-which by the way, describes a lot of the country’s outside temperatures right now.

Not here in sunny New Mexico; but then again, this side of the US has no water-oh what fun! The Year of the Wooden Horse is turning more like Petrified Wood in these parts.

S&P 500 (SPY) Found some support from the 12/18 low I wrote about earlier this week. A bounce could be sellable, but right here the risk/reward for shorts is funky

Russell 2000 (IWM) Held Monday’s low so far. And now with 3 Distribution days in volume which clearly confirms caution

Dow (DIA) Marginally held the 12/18 low

Nasdaq (QQQ) Oversold on the near term relative strength. Have GOOG reporting tomorrow after the close

XLF (Financials) Holding 21.00-best I can say

SMH (Semiconductors) Holding 41.00-best I can say here

IYT (Transportation) Back to an unconfirmed warning phase

IBB (Biotechnology) Hanging onto the bull phase

XRT (Retail) Under the 200 DMA for a distribution phase

IYR (Real Estate) Over 64.70 will start to like this again

XHB (Homebuilders) Inside day-now that’s interesting

GLD Looks good closing out near the highs

USO (US Oil Fund) Looks like its bottoming

OIH (Oil Services) Oversold

XLE (Energy) Holding the 200 DMA

TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs flirting with the 200 DMA

UUP (Dollar Bull) Holding pretty tough all things considered

FCG (First Trust ISE Reserve NatGas) Not following UNG

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