While I remain slightly bullish and think we will close the year higher, I believe the markets are very overheated here. I am expecting a 2-4% pullback to materialize (ES_F (S&P futures) down 9 ATM). In the meantime, there are three stocks that are hard to justify from a valuation perspective and appear to be at a decent short entry point.

I like P as a short here… It had a nice dead cat bounce last week, alleviating extreme oversold conditions. Moreover, today’s candle was hideous. The gap down on the 22nd held as firm resistance, despite previously acting as support. An inverse cup and handle can also be argued here, with the ~10 being the neckline. Regardless, I’m expecting a $10 print soon.

While I do not think LNKD is a short right here, I think its a short at either 71 or if an ugly candle is printed tomorrow. I’m again expecting past support to act as resistance. Moreover, the 20day MA is right here, which may hold the price down. This looks like it is a bounce to the breakdown before we see the next leg lower.

GRPN is pretty ugly. It has been beaten down and has printed two spinning tops after a dead cat bounce. I am expecting the trend down to continue shortly.

I like the $20 level here to watch. The bear flag broke down here (the 22nd; acted as short term support), and an ugly shooting star was printed and confirmed (12/2), showing resistance.

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Off topic… this has been driving me nuts, but who is the wedding singer in all of these hilarious movies? What else is he in? Anyone know his story? See below:

http://www.youtube.com/watch?v=REFB9eLx6vs
http://www.youtube.com/watch?v=iZy3FTTKT8s

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