The bulls are still firmly in contract of the equity markets. In spite of its statistically-sound reputation as the worst month of the year for stocks, September has, so far, done nothing but good things for bulls. Just look at these major indexes below—Dow Transports, S&P 500, Russell 2000, S&P 100, and the Dow Jones Composite to see how well-formed these bullish patterns are, and how none of them shows any sign of slowing down, much less breaking.
There are a few “squishy” sectors, however, and as a person who always wants to uncover a bear market, no matter how hard it is to find, there are some areas where I have concentrated my shorts: energy, interest-sensitive stocks, real estate, and financials.
The broker-dealer index, for example, looks poised for a potentially powerful pummelling.
The emerging markets are either halfway done or totally done – – I can’t tell – – with their countertrend bounce, but I am highly confident that this bounce will exhaust itself and we will break to more new lows for the year.
Interestingly, the NASDAQ Composite is starting to show a few signs of fraying, given the damage it has done to its supporting trendline.
Besides those few exceptions, however, it’s still a cold, cruel world for the three or four bears that remain.