Technical risk for longs.

I want to point out two important indicators of underlying market weakness:

1. Markets up, TVIX green.  The DJIA was up as much as 90 points today while TVIX touched 3.75 right after the open before pulling back to a higher low.  This sideways action could be 4th of C of 2 with one more move to 3.70 in the coming minutes followed by a short 5th of C back to $3.40-$3.50 range.  This would set us up for a big TVIX gap up on Monday.

 

1. MSFT (15 minute chart below) could not hold it's AM gains.  The AM spike (which I have referred to as a Unicorn Horn before) to $46.90 was quickly sold back down without reaching a higher high than Sept 19th.  The headlines were "Microsoft beats earnings, stock takes off".  When the market internalizes that bad earnings result in a trip to the woodshed for a 10-25% beating while good earnings do not result in any big upside, the message ripples quickly through the herd: RISK OFF.  

I am already planning to hold over the weekend.  Decision will be made based on action into the close of trading.



So far we still have not confirmed the bear market so my stops remain firmly in place.  I might not win just yet but I won't lose either.