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Are the Bears Finally Waking Up?

By  +Follow March 27, 2014 1:31PM
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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


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Results for SPY
Monique Fell
1 Jul 15 09:10:51
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
Cousin_Vinny
1 Jul 15 09:10:16
$SPY consider yday pullback was greater than today so far 0.99% hi to low vs 0.51% thus far hi to low - #observation http://t.co/mcbrDgpzFP
Oake & Keri
1 Jul 15 09:10:12
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
Market Scheming
1 Jul 15 09:09:56
$SLV, $GLD, $SPY Technical Analysis is out! http://t.co/h8NgGGxNO0 Stories via @ctomso @daytrend @AlysiaSarkisian
Arrigo Jeep
1 Jul 15 09:09:43
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
Cass
1 Jul 15 09:09:29
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
JKay
1 Jul 15 09:08:57
This is one key metric that is being overlooked by many investors and should be taken into consideration as well. $SPY $SPX
speculation
1 Jul 15 09:08:56
took $spy off -.15c.
Elena Berger
1 Jul 15 09:08:40
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
$$ D.J. NIEMIEC $$©
1 Jul 15 09:08:27
No $SPY trades for me today!! Remember, sitting on the sidelines is also Trading!! $SPY http://t.co/LVzBNULHPN
Engelbrecht Ads
1 Jul 15 09:08:06
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
JKay
1 Jul 15 09:08:00
While the $SPY earnings valuation may be a bit stretched earnings wise, the div yield of the $SPY $SPX is still strong according to history
Dave Epstein
1 Jul 15 09:07:29
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
Oren Netzer
1 Jul 15 09:06:54
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
R2K Tech Council
1 Jul 15 09:06:37
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
OnixFox
1 Jul 15 09:06:23
$SPY back in, may the house odds ever be in our favor
Cousin_Vinny
1 Jul 15 09:05:55
$SPY Point and Figure back to previous X X X double/triple top breakout level (1 denotes JAN) http://t.co/MEAPq99SlJ
Monavie Gel Sales
1 Jul 15 09:05:54
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
K Public Relations
1 Jul 15 09:05:28
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
Nancy Boots Davison
1 Jul 15 09:05:11
@GdaytoYou Sold more 1.40 posted entry .99. Looking for gap fill target. See if we get there. $SPY
Ray Ferreira
1 Jul 15 09:04:17
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
NWS Boulder
1 Jul 15 09:03:49
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
Mike Gruszynski
1 Jul 15 09:03:19
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
TheStreetOptions
1 Jul 15 09:03:07
CBOE introduces "shorties" - $spy Please #RT http://t.co/GiDhwQHC4G
Redstone Law Group
1 Jul 15 09:02:59
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
MERCADOS FULL HD
1 Jul 15 09:02:52
RT @julianyosovitch: clave q el sp500 quiebre los 2085 para anular a los bear.. veremos veremos $spy
RedBridgeCapitL LLC
1 Jul 15 09:02:30
The official launch of our prop training has begun with a huge NO Brainer offer: http://t.co/4RPm3VKDVC #Finance #ES_F $CL_F $SPY
Julian
1 Jul 15 09:02:12
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
Erin Seaward Hiatt
1 Jul 15 09:01:49
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
Quang Doan
1 Jul 15 09:01:42
sell on every bounce.... $ES_F $SPY $AAPL $TSLA $NFLX
Shelley Lester
1 Jul 15 09:01:33
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
Chicagostock
1 Jul 15 09:01:06
Happy 1 year anniversary $VIX bottom. $ES_F $SPY http://t.co/vAfd1UuM0c
1trader
1 Jul 15 09:00:51
tweeted entry 5 min BEFORE $SPY broke down, n wk Spy 207 Puts, sold 30 min +18%, sold 1 hr 20 min +13% #charted http://t.co/4e2aRTx14N
Gracie's Ice Cream
1 Jul 15 09:00:30
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
Stuart Berney
1 Jul 15 09:00:04
$SPY Apparently futures traders see the data as oversold as of last night. http://t.co/6dp5qSO6d7 via Twitshot http://t.co/UcpK8YizN4
Sentiquant
1 Jul 15 09:00:04
#toptickertweets $SPY $AAPL $FIT $TWTR $FB $NBG $DAX $SPX $SGYP $NFLX #sentiquant 20150701 12:00:06:929
Alan Jenks
1 Jul 15 08:59:56
RT @StockTwits: THIS is the chart investors and traders can't stop looking at -> http://t.co/Nn7Iuyiout $SPY $SPX http://t.co/b34yOrXmxV
Families in Society
1 Jul 15 08:59:46
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
HorsePower
1 Jul 15 08:59:41
RT @bondskew: a **monthly** $spy chart with a zoom into the past 18 months peeps better stop the $ from being bid otherwise #btfd http://t.…
Day Traders Group
1 Jul 15 08:58:56
total option volume http://t.co/Bzx0D74NnO $SPY $IWM $AAPL $EEM $VXX $QQQ $FB $BTU $BAC $TWTR $T $NFLX $GLD $MSFT http://t.co/CNMRGPu6u0
Cousin_Vinny
1 Jul 15 08:58:53
$SPY SPDR sectors are green sans $XLE and $XBI
Julie Myers
1 Jul 15 08:58:26
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
Told-You-So Outlier
1 Jul 15 08:58:22
a **monthly** $spy chart with a zoom into the past 18 months peeps better stop the $ from being bid otherwise #btfd http://t.co/zuvEFkk0Xn
James Biber
1 Jul 15 08:58:04
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
DustinGold
1 Jul 15 08:57:44
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
Julian
1 Jul 15 08:57:28
clave q el sp500 quiebre los 2085 para anular a los bear.. veremos veremos $spy
Scott Duehlmeier
1 Jul 15 08:56:58
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
Base News
1 Jul 15 08:56:08
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
2afrika
1 Jul 15 08:55:47
RT @philstockworld: #Greece $GREK is UP and #China $FXI is DOWN, what really matters? $DBA $SPY -- http://t.co/VeQLGbJIOw http://t.co/0Hghi…
CaeX
1 Jul 15 08:55:12
Great analysis on the S&P 500... $SPX $SPY $VXX https://t.co/KVm2XGc3ec
				
				
By  +Follow March 27, 2014 1:31PM
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