The market kicked off the Christmas shopping season with a Black Monday selloff. With the initial sales report showing Black Friday's sales result up 3% compared to 2007, the market sold off by dumping all the stocks, financial, technology and energy. Very few are spared from the selloff. Also, a committee of economists at the National Bureau of Economic Research finally declared today the U.S. recession was officially started in December 2007.
The market reminded us that it is still in a bear market by losing 679 points on the DJIA, 80 points on the SP500, and 137 points on the NASDAQ. The silver lining from today's selloff is the up/down volume ratio is less than 10-to-1, and the new lows were only 84 for the NYSE, and 145 for the NASDAQ. The significant of these statistics is when the market make a new low and if the number of stocks making new 52 weeks low does not expand, then it could be the first sign of an internal bottom for the market and the start of the bottoming process. Until then, keep a close watch on the new high/new low and the up/down volume the next time the DJIA make a new low, it could be the turning point. In the meantime, stay short in stocks and long the inverse ETF, DXD, SDS, QID, TWM until the market tell us it has bottomed.
