CORRECTION COMING?

There is definitely a reason to be bearish after the price action on Friday. Intel had blowout earnings after the close on Thursday, but the market (and the chip sector) sold off on Friday with higher than normal volume. With the SMH closing at the low of the day on higher volume, I would expect the support at $26.92 to be broken and possibly get a close below the 50 day MA. We should know a lot at the open on Tuesday. With the market closed today (Monday), it's given the professionals three days to digest the Intel and JP Morgan earnings. If the buyers show up on Tuesday, it could mean that the market could rally up to a new 52 week high...at least over the next few trading days. If sellers dominate the day, we could be in for a much larger correction. If the market can't get excited by the Intel numbers, I can't see it getting excited by anything else during this earnings season. If we do sell off tomorrow, start looking at some stocks that are trending downward. I've told you about BBY and HOG (HOG reports earnings this Friday). I will try to post other bearish patterns as I see them. The VIX traded higher on Friday, but closed off of its high. I still the the 17 area as a key level. If the VIX goes higher tomorrow (especially if it closes on the high of the day), we could be in for a larger sell off. If we move lower and close below 17, we could end up getting that new 52 week high. The lower volume in the market during the first two weeks of the new year concerns me. I just don't see the institutional investors buying or selling this market. They might just be waiting for the Q4 results, but that could create a crowded exit if they don't like what they see. That is why I'd be concerned about those Intel earnings. If that didn't create institutional buying, I don't know what else will. Tech has been one of the main leaders of this rally over the last year. It could be leading the market down right now. Pay close attention to the tech earnings this week. IBM (Tuesday), CREE (Tuesday), EBAY (Wednesday), GOOG (Thursday), and WDC (Thursday), just to name a few. AAPL is scheduled for next Monday (Jan 25th).

Also...I'm still having some trouble with my e-mail. I'm hoping to get it fixed tomorrow (or at least in the next few days). If you have sent me e-mails, please be patient for my reply. You can also plan on asking me questions in class this week if you have a session scheduled. Thank you for your patience.