TODAY WAS WEIRD

What a strange day in the market. I know that I told you that you could be a bit more aggressive if we closed above 1344, but the price action today on most stocks was very bearish despite the 100+ rally in the Dow. Most stocks gapped up at the open, then sold off through most of the day before closing either near the opening price or lower than the open. Read this next sentence slowly because it explains a very bearish price action. When a stock gaps up, then sells off to close lower for the day, but the closing price is still higher than the close the day before, it represents a warning that a sell off may be coming soon (I hope that sentence made sense...you English majors can let me know. It's late). We saw this on the silver chart (SLV) on 4/25/11...about 5 days before the crash. This price action does not mean there will be a crash, but it is a warning that there could be some selling in the future. Although the S&P 500 closed above that 1344 mark today (and it only did so on a 20 minute rally at the end of the day), I'm still going to be a bit cautious due the the bearish looking charts of so many individual stocks. VMW, LAD, CNI, WYNN, COG, EP, WLT, EOG, CAT, USO, HESS, etc.....I could go on and on. Notice how most of those stocks were in the energy sector. This could be an early warning sign for a sell off in that sector. This price pattern does not guarantee a drop so don't go out and short everything in sight. More than anything, it might just be telling us to wait a bit longer before getting too aggressive on the bullish side...especially in the energy sector. There were some good moves today like NFLX, ALTR, VHC, and APKT. If the market does end up selling off a bit, a good counter trend trade would be CMG. It had a bearish engulfing candlestick price pattern today. Although the current trend is up, the price action today suggests that it could pull back a bit over the next few days...perhaps $10 to $15 or more. I'd buy the put or put spread and place a stop above today's high. Sorry that I didn't have more good news today for you bulls that were waiting for the break above 1344. Who knows...in this market...we could have another weird day tomorrow as well and I could flip flop again.