With the current state of the market, the prudent thing to do is to sell bounces. We are seeing a change in market character, folks. Remember just a short while ago, when strength beget more strength and dips had to be bought? Those days are behind us, at least for the time being. Now buying dips is a bit more scary.
There are a few stocks I still like on dips: MA, FSLR, RIG, PBR, ag related stocks and a few more momo players. That’s about it.
There are plenty of stocks to short on strength. Housing, financials, and broken momentum stocks head the list.
We may still see a holiday run up, so shorting could be a tough go if you are using tight stops. However, it also could provide some great opportunities.