Early this week, on Monday morning, the market was melting like an ice cream cone on a summer’s day. It was glorious. Of course, that only lasted for a couple of hours. I had forgotten what that feeling was like, though – – where stock prices just slip without any bids. But as the chart below illustrates, there’s a reason such a feeling is as rare as hen’s teeth: the last time the market had honest-to-God weakness was nearly three years ago; as the exponential moving averages (in this case, on the S&P 500) illustrates, it’s just been a steady drift higher.
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I’ve had this short on for a couple of weeks, and it’s finally starting to break down nicely. I think there’s plenty of downside left.
Here’s today’s watch-list:
Long Horizon Pharma (HZNP)
In spite of the big bounce over the past couple of weeks, biotech – it seems to your humble host – has shot its wad. I’ve tinted the zone I believe represents meaningful resistance. My bet is that the weakness has already started to reassert itself.
A key target for bulls yesterday was to break up from the falling megaphone on NDX, and they did that. As long as NDX can hold above broken megaphone resistance that is a bullish break with a target back at the 3717.36 high. If NDX breaks back below broken megaphone support then that would raise a possibility that this break may be a bearish overthrow with an ultimate target in the 3000-3100 area, so I’ll be watching that trendline carefully. NDX 60min chart: