• bearish trade setups 4-22-14

For the past two months the market has been trading sideways. If you look beyond the S&P 500, and look at the Nasdaq and Russell, the market has been drifting lower. 

Now we are seeing six straight days of positive gains, assuming today ends higher. That breaks the four day win streak from earlier this year. But the key to successfully trading this market over the past two months has been to fade the heavy price moves until proven otherwise, and that is essentially what you have to do here. The market has lost is exuberance from 2013, and the inability of the bulls to sustain any significant price movement is very clear. 

When it comes to scaling in, I don’t recommend you trying to do so all at once. Do a little bit at a time at the extremes of short-term price swings. For the stocks below, you will want to target those with tight risk scenarios that allows you to easily flip to the long side with minimal damage if this market is determined to break out to new all-time highs again. Also be aware that there are a lot of earnings this week, and that you are not shorting anything into the report. 

Here’s the bearish watch-list:

bearish trade setups 4-22-14 

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