If you are a fan of the long side, there are arguments to be made in your favor. Our momentum indicators are about to totally erase their budding long side momentum that we saw forming up to this week. We can cling to the hope that our slow or long term momentum is still in the neutral zone, but it won't be for long unless things turn around quickly.
Tech was a glimmer of hope today. Semiconductors (SMH) were up and QQQQ was only down .24% after being down much more during the session. All the headlines are screaming about the housing and financial crisis, yet the Financials ETF (XLF) were just down a fraction, and real estate related ETFs (XHB, IYR) were some of the few equities on the plus side.
The wild swings we are having do suggest that we are at some kind of a turning point. If you are a Bull, which most of are wired to be, you are hoping this is bottom formation that you have been craving for so long. Pessimism is running very heavy out there, which the contrarians just love. However, don't bet the farm until you are sure that is happening. Our momentum charts will tell you when that is happening.
I have never been very good at playing the short side, so when things are going sour like they are today, I tend to just take some days off.
Check out our Top 25 Lists and TradeWinds Black Box Results for last week.
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