Indicators have been spot on showing that a break from the rally would be coming. For now, we are still watching the buy-on-the-dip investor mentality for another bounce off of these levels. S&P 500 and major indicies will need to hold these levels of support in order to have a chance of a near-term recovery.
Earnings are spooking investors as it appears that expectations have gotten ahead of reality.
We are closely watching the dollar and the NYSE A/D indicator we have created to see how overbought/oversold markets are. Also, the McClellan Oscillator is near oversold levels, but also shows some additional downside is very possible.
Junk bonds (JNK) may provide a good shorting opportunity, if it breaks MA trend. Watch the U.S. dollar index as well as it is having some difficulty breaking key resistance.
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Disclosure: Horowitz & Company clients may hold positions of securities mentioned as of the date published.