My View On The Nasdaq

What I found interesting about yesterday's price action is that everyone who has been bearish on the market for the past few weeks all of a sudden threw in the towel yesterday and is now bullish. They didn't become neutral, they became bullish which is a complete turnaround. Whenever I see that, I know to be on alert for a possible top.

Yesterday I posted the above chart of the Q's and the SPY. I mentioned that the NASDAQ hasn't make a new high with the rest of the market. I've been bearish on the NASDAQ and I'm also holding a small QQQQ short position from mid December which has done absolutely nothing.

I'm going to maintain my cautious view on the market and I'm not going to get caught up with the the crowd who is just reacting with the rest of the sheep. The only major index that I have short at the moment are the Q's which closed below it's 50 day moving average today. I'm looking to add to this position on weakness only... I want to see the market prove me right before I get any bigger.

The only stocks I've been buying recently have been commodity related stocks such as oil and metal stocks. I'm not looking to buy any technology stocks at the moment unless I see things change.

If you are curious why I've been bearish on the NASDAQ and cautious on the rest of the market, just read the archives to this blog.. It's based on cycles, seasonals,leaders not leading,sentiment and intermarket relationships. Let's see how things unfold over the next few days.