There are definitely some bearish divergences under the surface of this market

Sure, we are trading at all time highs, but you have cracks starting to emerge in the small caps’ dam, and with only 56% of stocks as a whole, trading above their 40-day moving average, stocks are not as healthy as you’d like for them to be. 

The best way to make money of late, has been to avoid buying the bounce on anything that has had a major sell-off of late, like Chipotle (CMG) or Merck (MRK) and instead focus on the high-fliers like Apple (AAPL), Square (SQ), Nvidia (NVDA) and Micron (MU).

It is hard to bring yourself to keep buying these stocks at the all-time highs, but those are the stocks that ar driving the market. Catfishin’ for the downtrodden stocks simply hasn’t been an ideal strategy of late. 

But back to the bearish watch list; I don’t have any short setups at the moment. That doesn’t mean that I won’t eventually have some, but with the market behaving like it is, there has been very little incentive in doing so. As I said though in the beginning of this post, there are some bearish divergences that have emerged, not to mention the SharePlanner Reversal Indicator flashing a bearish divergence of its own too. Getting short because of these divergences is not the answer though. You have to wait for the price action on the indices to confirm the move, and at the moment, there is no confirmation in price. 

So be patience, but be aware of the possibilities. 

My bearish watch-list:

bearish trade setups 10 31 17

 

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