Why You Should Short The Market

This is going to be pretty short post, but powerful.  Charts are wonderful visual guides to market behavior.  Usually when patterns on a chart repeat themselves they become reinforcing of the behavior that leads to them.  A key indication of the health of a stock or a market is the 200 day moving average.  If the majority of stocks are trading above that average the market and the stocks are usually in healthy uptrends, but when markets begin to break down  below the 200 day moving averages that is a warning signal of things to come.


What the chart below describes is the percentage of stocks in the S&P 100 above their 200 day moving average we have dropped quickly to only 60 percent now of stocks are trading above that average.  The pattern over the last few year has been pretty reliable.

So as you are preparing to trade keep this in mind.  The market is bearish and looks like it might get more bearish in the coming weeks.



 If you find this information helpful you can subscribe to our Smart Trade or our Live Trade Newsletter's. Click here for more details.

Disclaimer: This article is intended to be informative and should not be construed as personalized advice as it does not take into account your specific situation or objectives