The Market gave us a Sell Signal. The first S&P target is 1097 and the second target is 997.

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The market gave us a sell signal. Needless to say this is a very volatile market. Washington and its political escapades could change this market on a dime. However, the trend has changed in a week giving us a sell or short signal. The image above gives you the parameters of the Pre-Sell entry prices for the indices. It is important that you make sure they are stop limit orders. You will not get filled on the orders unless the price is touched. The entries are not that far away from the closing prices, so be cognizant of what is going on with the debt limit discussions. The market could turn instantly, if they make serious commitments to decreasing the debt. As you know, I am not one to worry about news and fundamentals. However, in this case, it is such a monumental decision that we should be sure our stops are set. If your risk tolerance requires you to put a hard stop on the trade, that will be fine.

Here are the charts with signals and targets for the SPY (S&P), DIA (Dow 30), and the IWN (Russell Value Stocks). You will notice that the target price is much lower on the S&P and the Russell than the Dow. If we get filled and this breaks down, get ready for a wild ride down. The first S&P target is 1097 and the second target is 997. If you don’t short the market you could buy an inverse ETF. If you are not comfortable with that prospect, put your money in the money markets or cash, until we get another buy signal.

S&P

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Dow 30

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Russell

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I have taken the Power Scan and filtered with no stocks under $20.00 and 27 Million shares traded a week. The following ten “high probability shorts” are the results. This could be a good option play if you wanted to buy puts on these stocks. Make sure you hit the fill price on the stock before you buy the option puts.

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Forex

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