Written by Rich B. Meier
TopEquityNews.com

Ben Bernanke speaks and bears takeover the market. Now that members of the family Uselltodae (really Ursidae) are out, they have made quick work of support and shredded NASDAQ 2600.

Unless bulls can regain control of the floor today or tomorrow, the Grinch will be the only thing that is green Christmas week. TEN sees a trio of negative indicators shooting warning flares into the evening sky – better look out Rudolph.

  • The NASDAQ is looking up at its 50-day-average for the first time since late October.
  • The 12 day-average and MACD line are on the verge of bearish cross-unders.
  • A trend-line connecting a series of higher lows has been violated.

Minus a quick recovery, it adds up to one last safety net around 2475 before a re-test of 2011 lows. TEN also sees the technical DNA markings of another head-and-shoulders pattern. While we recognize that the neckline is a while away at 2330ish; a close below there would be a DISASTER.

Yesterday, we suggested a little insurance could be had with inverse ETFs like ProShares Short QQQ (PSQ) or riding the dollar with PowerShares DB US Dollar Index Bullish (UUP).

When the bull juice starts to sour, it’s equally as important to avoid the weakest sectors. If they struggle when thinks are headed higher, they could get flushed in a downdraft. According to TEN’s in-house ranking, the three worst performing sectors are:

Obviously, looking back is 20/20. It would be much easier to be King of Wall street if time circled counter-clockwise. On the other side of the dashboard, Top Equity believes recent top performer, Retail & Wholesale stocks – could be rolled down the hill.

Tuesday’s Retail Sales Report for November was deflating. It wasn’t too long ago that Black-Friday and Cyber-Monday had investors tipsy on hopes for a green Christmas. That sleigh of profit presents crashed to Earth yesterday.

Exchange-traded-fund Retail HOLDRS (RTH), which tracks the retailing industry, may have topped out. Its chart shows the ETF breaking down on accelerating volume – a big no-no. RTH’s price action also printed a bearish MACD cross-under – another sell signal.

In addition to the dollar ETF and short NASDAQ fund mentioned up-top, ProShares UltraShort Consumer Goods (SZK) would be an aggressive way to play any further weakness in the sector. The investment seeks daily investment results, before fees and expenses, which correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Consumer Goods SM Index.

In plain English, if the Consumer Goods Index drops 2% from open to close, SZK would gain roughly 4% on a day by day basis. The flip-side of that equation is true and works against shareholders when the underlying index rises.

Sorry about the downer of a report in what should be a cheerful holiday season; however, if Wall Street turns Scrooge this year and kills the Santa Claus rally, the investments mentioned above could turn the coal in your stocking to diamonds.

Stock Market Trends: ba, ba, ba Bennie and the Bears is an article from:
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