Cloud-computing play RAX is down big after-hours as an initial reaction to earnings. Should that weakness carry over into Tuesday, coupled with a broad market that cracks, I like CRM as a short idea to trade down in sympathy with RAX. Salesforce.com (CRM) has had an incredible run in 2012, but looks vulnerable to a swift gap-fill below $150.
Should the market continue its resiliency, I am still impressed that the financials are holding the line. We know that the XLF has been stubbornly keeping $15 as firm support. I suspect that the regional banks might offer an even better bang for your buck, though. They have largely resisted any type of distribution in their charts, as near as I can tell.
In the KRE, ETF for the regional banks, I see many daily chart patterns like that of Susquehanna Bancshares, Inc.., i.e. Basing along and recently bull-flagging. The regionals have teased bulls in recent weeks, but have offered very little meat for bears to sink their claws into. I am looking here if the bulls can pull off the upside surprise.
Until we get more clarity in this market, preparation takes on an even more important role than usual. Having both short and long ideas in a corrective market is a good way to approach each session feeling relaxed, confident, and not forcing yourself to press, which is often the downfall of many a bad bet placed.