The markets are flushing lower today, negating the entire move from last Friday when we saw a solid Nonfarm Payrolls Report, great revisions to past numbers and a fantastic ISM Report. The markets surged higher as the Dow Jones Industrial Average closed above 14,000 for the first time since 2007.
As expected, it appears Dow 14,000 was just a way to get the small, retail investor excited and back in the stock market. Indeed, that has been a common theme throughout history. Whenever the markets are at 52-week highs and major levels are closed above, the retail investor buys. What are they buying? The institutions, who are happy to sell.
On a technical basis, should the reversal hold, it will be very bearish. A reversal candle -- negating the entire move higher -- should signal further downside in the coming weeks. The fact that it's happening at a 52-week, multi-year high, adds fuel to the fire. Additionally, one must be concerned that mutual fund inflows have continued at a record pace as the retail investor flocks into stocks.
Swing Traders Action Update
Today, great gains were seen in Pacific Ethanol Inc (PEIX). An alert was given to members inside the Research Center to accumulate at $0.35 a few weeks ago. Today, the stock spiked dramatically higher. Profits were taken at $0.45 for a 28.5% gain.
In addition, members had accumulated 25% of their portfolio on the short side of the market. All shorts are in the money and rocking. Profits continue to flow. The amazing gains are generated from the proprietary strategies developed at InTheMoneyStocks.com. They have an 80-90% success rate.
Related: SPDR S&P 500 ETF Trust (SPY), SPDR Dow Jones Industrial Average ETF (DIA), PowerShares QQQ Trust, Series 1 (ETF) (QQQ), DISH Network Corp. (DISH) and 3M Co. (MMM).
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