The broad market went up and closed down on higher volume which means distribution. The SPY looks like a good short or buy the SDS. In yesterday’s post I mentioned I went long the FAZ and ERY which are 3x short financials and 3x short energy. The chart below shows the confirmation of selling on higher volume today in the XLF. Now let’s see if we get volume at the swing low (I circled in red) at $11.10 on more than 193 million shares then were heading down to $10 range for support.

I also liked the action of the Russell 1000 (IWB)  instead of the Russell 2000 (IWM). The chart below shows high volume selling today. Price went above yesterday’s high and close below is on high volume - downtown we go. I will enter into the BGZ in the morning which is the 3x bear of the Russell 1000.

I have been following the crazy ride of the TLT ( iShares Barclays 20+ Year Treasury Bond) and it’s so way over bought. This article on Bloomberg also talked about  “Time to sell Treasuries“.  I thus entered into the TBT which is an inverse ETF of the TLT. As you can see from this chart of the TLT there is heavy down volume pressure on Jan 5. On Friday we just missed the high of the Jan 5 by $0.07 and closed to the downside. If we move down on more than 4 million shares and can break the $111 price we are fall further to $103 range.

I entered into the TBT on Thursday and have my stop just below the day low of $38.41. This should go to $42.96 first then…..up to $50 if the bond does breakdown.

I am still bullish on gold going higher into February as the US Dollar weakens. I am long AZK, ANR, DGP, AUY, GBG, GG.

Also bought on Friday for a quick play on TNA (Small Cap Bull 3X Shares) it is basically 3x leverage on the Russell 2000 which is use the IWM for the proxy. It was good to see another trader that I follow at Buying on the Dip also call this trade for TNA…….up up up we go to $40.

The market lost 10% in only 2 days!!! But wait there is more…the downside volume to light.

Check out the chart of the SPY. I circled the positive high volume days. As you can see today was just people taking profits from last weeks run up. The selling volume is much lighter and the price touched $90 today which is support. I bought SDS 2 days ago at the turn sold them today at $88…a bit too early for an +10% profit.

The SPY, DIA, IWM and QQQQ all reached the high volume high support today so I bought SSO, QLD, UWM, and DDM and TGB. Let see if I’m right and get a turn back up.