NASDAQ

If you read my comments yesterday on the NASDAQ , you will recall the red flags that I saw developing over the last few trading sessions. I spoke about how stocks were beating their numbers but were selling off. I spoke about how CSCO and INTC which are two NASDAQ heavyweights were about to break their 50 day moving averages and appeared to be much weaker than the NASDAQ. I also mentioned that I was leaning towards the short side. Well today I shorted the Q's.

On the open the two stocks which I was watching very closely (INTC and CSCO) broke their 50 day moving averages. That's all I needed to see and I immediately shorted QQQQ.

Notice yesterday I didn't say I was looking to short the Dow or the S&P. The reason is because the NASDAQ was the index that was showing signs of selling off and that's exactly what we saw happen today. The Nasdaq was the market that got crushed while the S&P and DOW had a minor sell off.

Last night Jim Cramer spoke about getting out of technology. He mentioned that it's based on seasonality. Well I'm way ahead of you Jimmy boy. I posted the above chart on my blog last month which shows how the market sold off for the past 6 years every January.

QQQQ closed at the 50 day moving average so I'd love to see a close below the average tomorrow. IBM reported after the close today and as of this writing is getting hit..The stock is down 5 dollars in after hours trading.

One day down in the Nasdaq doesn't make a trend, but given the evidence I am seeing, I feel the Nasdaq will break it's 50 day and trend lower for awhile.