The market is bouncing hard with authority today. I’m liking but what I am seeing from the bulls. These so-called dead-cat bounces have managed to be much more than what they have been historically known for. When we have gotten these 90% down days from the market like we got yesterday, the bears simply cannot keep it together if a bounce proceeds the next day, and what ensues is massive covering out of fear their profits will be lost again. 

Most of my positions in this short watch-list are those showing some solid distribution patterns. If they have already broken down, then I am waiting for a retest of previous resistance levels before making a decision to get short on it. 

Here’s the deal, I don’t think we are going much lower in the near term. I could be fully wrong, but based on what we have seen over the last 6 months, huge sell-offs simply do not stick. 

Three stocks that I really like are all sporting head and shoulders patterns:

Dana Holding (DAN) – formed over the last 2.5 months. 

D.R. Horton (DHI) – solid four month head and shoulders pattern, and a break of the long-term uptrend. 

First Horizon National (FHN) – Already confirmed but wait for the retest… looks really good on a pop. 

 

Here’s the rest of the watch-list for shorting

short setups with distribution patterns

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