Friday’s bounce came as expected. If it were not for Japan and Libya, I’d feel pretty good about being long right now. In fact, I’d be bullish for the next week or so. However, there is so much going on in the world, so much confusion and uncertainty, it makes it hard to get a feel for what comes next.
The QQQQ is still trading beneath the 50 day moving average, as is IWM (just barely).
I think it makes sense here, given the uncertainty in the marketplace, to have some shorts in mind. While Friday’s bounce was not strong enough to generate really strong short setups, if the uncertainty from Japan and Libya weighs heavily on the market, we may not see a couple of strong up days on which to get short.
Since the QQQQ is still beneath its 50 day moving average, it might be good to focus on tech stocks but I have included other sectors as well.
There were also some energy stocks that made the screen but I did not include them. More on my thinking about that in the next post.
