TCM Notes : 8/18/09

• Well the indices showed us another distribution day Monday bringing the total to 5 for the SP500 and 4 for the Dow and Nasdaq. IBD takes the market outlook from confirmed uptrend to market in correction. No new buys advised at this time. Many of the names I'm looking at now gapped lower into 50dma supports today. It will be critical to see how they respond at this level. A sharp bounce higher is the ideal scenario, but my gut tells me they will dance around those levels before breaking lower. It's the non earnings month and a half grind now......straight into the statistically worst month for the market....September. IBD had the distribution days flagged and we were getting weak before the Shanghai index broke it's 50dma. So it's funny to see the folks on cnbc asking the question if this is the pullback. Yes, this is it. How will you trade it? That's the question. By the end of the week they'll probably figure out that the market is selling off and the dollar is showing some strength. Shouldn't take long after that for a resumption of the bearish overtones to get louder causing those wanting to buy the pullback to waffle. This will create another nice buying opportunity heading into the fall. Or so I think....until proven right/wrong by Mr. Market. And he can be an asshole from time to time!
• Kudos to Investors Business Daily for calling it from a price and volume perspective daily.