Is the Tide Finally Turning?

A weak jobs report finally knocked the strength out of all the indexes. Across the board - SPY, DIA, QQQQ, IWM - indexes sank throughout the day. Nothing dramatic, but definitely encouraging for the bears among us.

The $COMPQ (NASDAQ Composite) chart shown above has a myriad of forces that stopped the upward assault dead in its tracks. The markets are so universally high at this point, my optimism for a collapse in the market is growing again. From a seasonal perspective, markets don't tend to fall apart until September, but looking at just about every major index, I am far more inclined to bet on a drop in the market instead of a continued rise.

I've become somewhat disenchanted with the MDY and have found the IWM is a much better instrument for this kind of trading. It's far more heavily traded, and it doesn't jump around nearly as erratically as the MDY, even though a market plunge would benefit either ETF equally.

MDY: End of an Error

For over a month now, I've been patiently waiting for the MDY (S&P MidCap) to fall to pieces. It has not done so. Not even close. Indeed, it's trudged higher, and although until yesterday the technical story was still intact, that story got pierced today when the price of the MDY went above its trendline.

This is still not a healthy market, to be sure, and you would be hard pressed to find good stocks to buy. But my case for a slam-dunk short on the MDY is gone now, and we are back in wait-and-see mode. It's disappointing, to be sure, but the power of technical analysis is that it tells you when you are wrong, and the good technician listens and obeys!

GLW Breakout

Last Friday (May 27th) I pointed out Corning (GLW) was the one stock chart I really liked for a long position. So far, so good - it has climbed nicely since then, even outperforming the all-powerful Google (GOOG) today. The chart looks even better than ever.