logo
Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?

Register
    

 


Are the Bears Finally Waking Up?

By  +Follow March 27, 2014 1:31PM
Share:
Tickers Mentioned:

While bulls have held a firm hold on the market for the current run higher to the all-time high, the bears may be finally waking up from their winter hibernation. In this week's interview with Toni Turner of TrendStar Trading Group, we discuss risks to the market's uptrend and whether traders should be playing Russia's volatility right now.

EQ: Since we last spoke, the S&P 500 managed to bounce off the 1,850 support level. Is this an encouraging sign for the market to move higher or are we still testing this range?   

Turner: In the short term right now, the S&P 500 is in a consolidation pattern. It’s deciding whether it wants to break higher above the March 21 all-time high or fall below 1,850, or even 1,840.

The index itself isn’t tradable, but, if you look at a daily chart of the SPDR S&P 500 (SPY) , you can see increased volume on negative days. Those are distribution days, and can suggest a “changing-of-the-guard,” from bulls to bears. You can also see high-volume selling days on the PowerShares QQQ (QQQ) , which represents the NASDAQ 100.

That makes me believe that the bear are awakening from their winter nap — if only for the short-term. Even so, I’m raising some cash now to be ready for any new opportunities that come up.

EQ: You noted that the iShares Russell 2000 (IWM) had approached its all-time high last week. It’s since fallen from that level, but if it can revisit its uptrend, is that a bullish signal with small-caps showing strength like this?  

Turner: The iShares Russell 2000 ETF can act as a great indicator of internal market strength because it tracks small-cap stocks. Recently, the IWM has gapped up at the open each day for the past four days out of five, but then traded downward to close lower at the end of the day. It’s now trading below its 50-day moving average, which is a negative signal.We will monitor the Russell 2000 to see if it can rebound from here or sink lower.

At this moment, the IWM is indicating further weakness in the market, at least for the short term.

EQ: What is the IWM telling you when it gaps up but closes lower on a consistent basis like that?

Turner: It tells me that traders are either short and are covering their positions in orders issued before or at the open. Another reason could be that there are some investors still left in the buy-the-dip mentality, however, there’s just too much supply and there are not enough bulls to absorb the supply.

That would cause a gap up on bullish momentum, but then the bears quickly take over and the bulls can’t win against them. There’s just too much supply.

EQ: There are a lot of market speculators playing Russia ETFs. Is this an area you're looking to or are you avoiding it?

Turner: Many investors left Russia’s stock market before the crisis in Crimea. You could see at the beginning of this year that the Market Vectors Russia ETF (RSX) started to head lower. Russia’s economy has been described as fragile.

If financial sanctions are increased, it could trigger more capital outflows, which would then cause the ruble to depreciate against the euro and the dollar. Russia’s sovereign bond yields would soar, which makes it more expensive for Russia to borrow money.

Now the RSX sold off to just under $21 on March 13 and has rebounded since then, but is hesitating, again. So I would not be a buyer here. The Russian market may deteriorate even more.

EQ: There are a few different types of ETFs for the Russian market. In addition to RSX, there’s the triple-leveraged ETFs like Direxion Daily Russia Bear 3X Shares (RUSS) and the Direxion Daily Russia Bull 3X Shares (RUSL) , but those do come with a lot more risk.

Turner: Right, but I never recommend these because they can be real widow-makers in the wrong hands for inexperienced traders. I do have a small position in the RUSS, but I’ve been doing this long enough and know how much discipline it takes. I’ve seen too many traders get excited and jump into these types of instruments and then get hammered.

These triple-leveraged inverse ETFs can be very volatile. They tend to gap open, sometimes in large price increments, depending on the news. They’re also not meant for holding for more than a day or two. So I really don’t recommend them, especially for inexperienced traders.

EQ: Are there any sectors or industry groups you're watching right now?

Turner: Yes, but I don’t see anything too wonderful. I really haven’t found that much that I like right now. I am keeping an eye on the iShares US Oil Equipment & Services (IEZ) for a pop over $ 67.50.

I’ve gone through a big selection of sectors and there hasn’t really been anything I’ve seen that I like. The only other one that would be interesting to me on a technical basis would be the iShares MSCI Chile Capped (ECH) . It’s slightly overbought now, but it has sold off since its 2013 highs of around $68. It’s now at around $45. It recently made a higher low, however, and it could have some upside from here.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


Liked What You Read? Join Equities.com as a contributor and get eyeballs on your content FOR FREE!

Results for SPY
VIX For The People
29 Mar 15 12:24:17
RT @steenbab: New highs and lows in the stock market and what we can learn from them: http://t.co/FFYyiYnbTD $STUDY $SPY
MaryNYC
29 Mar 15 12:24:04
RT @chessNwine: NEW POST: Weekend Video Strategy Session 03/29/15 {Video} http://t.co/tuBeEB0LqT $ALTR $IBB $INTC $QQQ $SPY
Mark Vierra
29 Mar 15 12:23:59
RT @HotStockMarket: Mark Vierra's $SPY weekly sentiment poll. Up, down or flat for the coming week? Cast your vote... http://t.co/agmZEdOkyw
Tom
29 Mar 15 12:21:59
RT @StockTwits: How big is the U.S.? This big. Amazing share from @_seandavid -> http://t.co/GeKMi9c9cI $SPY $DIA http://t.co/8T59qhGuR8
James Carlson
29 Mar 15 12:21:13
$ES_F $SPY Model Trading Plan results for week of 3/23 have been posted: http://t.co/tyfrgHep9V
Katphiche
29 Mar 15 12:20:50
RT @StockTwits: How big is the U.S.? This big. Amazing share from @_seandavid -> http://t.co/GeKMi9c9cI $SPY $DIA http://t.co/8T59qhGuR8
♫♪ Soul Girl ♪♫
29 Mar 15 12:20:25
RT @chessNwine: NEW POST: Weekend Video Strategy Session 03/29/15 {Video} http://t.co/tuBeEB0LqT $ALTR $IBB $INTC $QQQ $SPY
Ariel
29 Mar 15 12:19:55
RT @lunatictrader1: World stock market outlook for week of March 30, 2015 http://t.co/ojVNlXbsGk $SPY $QQQ $GLD $TLT $USO
MUCKBEAR
29 Mar 15 12:19:30
RT @chessNwine: NEW POST: Weekend Video Strategy Session 03/29/15 {Video} http://t.co/tuBeEB0LqT $ALTR $IBB $INTC $QQQ $SPY
Venky Srinivasan
29 Mar 15 12:18:07
"@chessNwine NEW POST: Weekend Video Strategy Session 03/29/15 {Video} http://t.co/nvf7S5P3iG $ALTR $IBB $INTC $QQQ $SPY"
Trade Archer
29 Mar 15 12:17:40
$SPY big buyers are out and MACD is bearish. Too much sideways action since the new year. Be patient for an entry http://t.co/LGDbXxTdb3
Chess
29 Mar 15 12:16:20
NEW POST: Weekend Video Strategy Session 03/29/15 {Video} http://t.co/tuBeEB0LqT $ALTR $IBB $INTC $QQQ $SPY
Yarazza
29 Mar 15 12:16:10
$SPY One last chart http://t.co/CFVpO4vBqI
Logical Invest
29 Mar 15 12:14:35
Our Universal Investment Strategy - 7% Return last 6 months, Sharpe 3.0 $SPY $TLT $GLD ... http://t.co/FEKWG36oOX http://t.co/IpOBMfglyy
Logical Invest
29 Mar 15 12:13:03
Have you seen our recent articles on #SeekingAlpha? follow us $SPY $VIX $TLT $GLD #Trading http://t.co/1XOfI400Aq http://t.co/0zRQvPgUJu
Trade Well
29 Mar 15 12:12:41
RT @Couzin_Vinny: New BLOG POST "Trend Change or Dead Cat Bounce?" http://t.co/x6snsPwH9i $SPY $NYA
زياد بن
29 Mar 15 12:11:42
US Economy: Global growth sloth gets S&P, Brazil, Greece and the GOP (Global Pre-markets Round up)|The Initiative $SPY
Michael Sonnenshein
29 Mar 15 12:09:04
RT @StockTwits: How big is the U.S.? This big. Amazing share from @_seandavid -> http://t.co/GeKMi9c9cI $SPY $DIA http://t.co/8T59qhGuR8
S&P Fractal
29 Mar 15 12:07:21
New $SPY alerts have recently been posted. Check them out now. http://t.co/gOixl7DlEv
F4Lc0N LoWNOISE
29 Mar 15 12:06:54
RT @StockTwits: How big is the U.S.? This big. Amazing share from @_seandavid -> http://t.co/GeKMi9c9cI $SPY $DIA http://t.co/8T59qhGuR8
Andrew Horowitz
29 Mar 15 12:05:59
RT @StockTwits: How big is the U.S.? This big. Amazing share from @_seandavid -> http://t.co/GeKMi9c9cI $SPY $DIA http://t.co/8T59qhGuR8
TheStreetOptions
29 Mar 15 12:00:28
Introduction to Swing Trading - $spy Please #RT http://t.co/tzSS4lDD1L
Financial Iceberg
29 Mar 15 11:52:31
SP500 Financials. HVol: Very Unusual Trading Behavior ? $SPY, $SPX, $ES_F, $XLF #Trading #Emini #ES_F #SP500 #xlf http://t.co/QpN6ljV4M2
Lis!
29 Mar 15 11:52:18
RT @StockTwits: How big is the U.S.? This big. Amazing share from @_seandavid -> http://t.co/GeKMi9c9cI $SPY $DIA http://t.co/8T59qhGuR8
PortfolioWorkstation
29 Mar 15 11:51:48
RT @AdamHGrimes: "Best of" post from archives: Advice to new traders & the thing that can make a difference http://t.co/E70WNtxs8n $study $…
Cheds Trading
29 Mar 15 11:51:04
@RookieOnWallSt $SPY - Daily - Bottom of channel and rising, good value vs EMA, money-flow needs to improve http://t.co/9CMYavYusb
ForexExaminer
29 Mar 15 11:48:16
Yellen Sees Gradual Rate Increases Starting This Year http://t.co/ALd2E76vpO $SPY $USDX $MACRO
Marc A
29 Mar 15 11:42:42
$SPY you can also check out my links tab for a couple more relevant charts, follow @marroyo8719 for future charts
Marc A
29 Mar 15 11:40:03
$SPY Some examples of prior charts http://t.co/NLLKtcf4pM http://t.co/KwU1UIFYn1 http://t.co/1yyCO5MKpN http://t.co/rL2IZ1ns7P $STUDY
Rene Moreno
29 Mar 15 11:35:15
RT @StockTwits: How big is the U.S.? This big. Amazing share from @_seandavid -> http://t.co/GeKMi9c9cI $SPY $DIA http://t.co/8T59qhGuR8
Dan
29 Mar 15 11:32:28
RT @TradingAlpha11: $SPY, $AAPL, $AA, $AMZN, $APA, $ADSK, $CSX, $EOG, $XLF, $FE, $JCP, $YELP Entries and Levels: https://t.co/L2A7ASCiTU
Chandler Griffin
29 Mar 15 11:31:46
RT @StockTwits: How big is the U.S.? This big. Amazing share from @_seandavid -> http://t.co/GeKMi9c9cI $SPY $DIA http://t.co/8T59qhGuR8
Kate Edson
29 Mar 15 11:29:09
RT @steenbab: Here's a profitable trading pattern that illustrates why courage is key to trading success: http://t.co/HhT4lIPffI $STUDY $SPY
ForexExaminer
29 Mar 15 11:27:18
March Jobs, Greece Debt Deadline: What to Watch for the Week Ahead http://t.co/IebAHZ3HTs $SPY $EURUSD $MACRO
Kate Edson
29 Mar 15 11:27:16
S&P has gone 28 days without a 2 day rally. Longest without back to back wins since 1994. #NoContinuation #chop #chop $SPY
NeoSolomon
29 Mar 15 11:26:09
RT @MatrixMarkets: S&P 500 +0.1% YTD Below & testing 100d avg -2.95% below 3-2-15 all-time closing high $SPY #SP500 $SPX #stocks http://t.c…
BetterBeta Trading
29 Mar 15 11:25:52
$TICK rebound from below -600 has had favorable short-term risk/return for long $SPY over the past year. $STUDY http://t.co/4kQxe8v6k9
Don Fizi
29 Mar 15 11:24:27
RT @StockTwits: How big is the U.S.? This big. Amazing share from @_seandavid -> http://t.co/GeKMi9c9cI $SPY $DIA http://t.co/8T59qhGuR8
SH
29 Mar 15 11:21:42
Percent of SPX stocks above 200EMA diverging negatively with $SPX. Not sure if it means much.. $SPY $QQQ $IWM http://t.co/l3WRZb2MiD
Eric Swanson
29 Mar 15 11:20:20
RT @StockTwits: How big is the U.S.? This big. Amazing share from @_seandavid -> http://t.co/GeKMi9c9cI $SPY $DIA http://t.co/8T59qhGuR8
Scott Bauman
29 Mar 15 11:18:13
RT @SJosephBurns: 10 Fast Facts about the $SPY Chart 3/29/15 http://t.co/SI1bzqJ3t7 Welcome to Whipsaw City. $SPX http://t.co/WZZQEPxLXZ
Ben Onten
29 Mar 15 11:18:09
RT @StockTwits: How big is the U.S.? This big. Amazing share from @_seandavid -> http://t.co/GeKMi9c9cI $SPY $DIA http://t.co/8T59qhGuR8
Marc A
29 Mar 15 11:17:44
I'm going 2b posting more charts on my twitter account, follow me @marroyo8719 4 my take on the markets as well as stock ideas $SPY $STUDY
Financial Iceberg
29 Mar 15 11:15:27
Russell 2000 vs SP500.: Still Outperforming SP500 ? $SPY, $SPX, $ES_F, $IWM, $TF_F #Trading #russell2000 #SP500 http://t.co/bNR1l6ErBG
T Hot
29 Mar 15 11:15:13
RT @Cottontradings: “@StockTwits: How big is the U.S.? This big. Amazing share from @_seandavid -> http://t.co/D7f9cbOUsi $SPY $DIA http:/…
Wayne Dixon
29 Mar 15 11:13:59
RT @StockTwits: How big is the U.S.? This big. Amazing share from @_seandavid -> http://t.co/GeKMi9c9cI $SPY $DIA http://t.co/8T59qhGuR8
James Scott
29 Mar 15 11:13:05
RT @StockTwits: How big is the U.S.? This big. Amazing share from @_seandavid -> http://t.co/GeKMi9c9cI $SPY $DIA http://t.co/8T59qhGuR8
Jayson
29 Mar 15 11:11:53
RT @StockTwits: How big is the U.S.? This big. Amazing share from @_seandavid -> http://t.co/GeKMi9c9cI $SPY $DIA http://t.co/8T59qhGuR8
PugLife312
29 Mar 15 11:11:41
RT @kunal00: Watch List 03/30/2015 | Bulls on Wallstreet http://t.co/kfrVyiOR3i $spy $cemp $cybr $dvax $gwph $nwbo $ondk $rgen
MarkFuccio
29 Mar 15 11:10:51
RT @StockTwits: How big is the U.S.? This big. Amazing share from @_seandavid -> http://t.co/GeKMi9c9cI $SPY $DIA http://t.co/8T59qhGuR8
				
				
By  +Follow March 27, 2014 1:31PM
Share:

Comments

 

blog comments powered by Disqus

About us

Equities.com is the most advanced interactive online social ecosystem for the financial industry, serving as a resource center and next-generation communication platform that connects self-directed investors with public issuers, market experts, and professional service providers and vendors. Registered members can leverage our exclusive proprietary research tools such as the Small-Cap Stars, which outperformed 90% of all small-cap mutual funds, and robust do-it-yourself E.V.A. research reports. The Equities.com Issuer Dashboard is the ideal tool to communicate and manage investor awareness campaigns to the investment community, as well as to access valuable resources to help your company grow.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.