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Home > News and Opinion > Stocks Showing Signs of Distribution

Stocks Showing Signs of Distribution

Lee Siler | Wednesday, June 17th, 2009

Stocks continued their sell-off, as trading volume rises again. There is now some clear distribution going on in the major averages. Over the past two days we’ve seen the Dow Jones, Nasdaq and S&P 500 drop well over 3%. Even the leading stocks and sectors are starting to rollover.

For today, my bias is to the short side.  I have a position in the Direxion Financial Bear 3X (FAZ).  This is a leveraged ETF that takes a bearish posture on the financial group.  Another idea is the Proshares Ultrashort QQQ (QID).  This ETF is a 2X leveraged fund that is bearish on the Nasdaq 100.  Both ideas seem to be ready to make a move.  However, keep in mind these ETF’s are very volatile and are not for the faint of heart.

As I mentioned yesterday, this pullback should not last that long and shouldn’t be very punishing to the averages.  But, I would keep some bullets in my gun and get ready to do some bargain hunting.

Until tomorrow, I wish you a great day…

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