Major averages rose yesterday on lower, below average volume. The S&P 500 closed just below its 50-day moving average which could serve as resistance, especially given the straight-up-from-bottom action in the major indices. A bounce in oversold oil has served as a catalyst for the bounce in the markets, but given the lack of leadership and little to buy, the uptrend may be short-lived. As always, keep stops tight whether on the long or short side in this news driven gap-up, gap-down environment.
With respect to our recent Short-Sale Set-Up report on Facebook (FB) members should understand that the stock should be shorted under the conditions of a general market rally failure. Such a failure would also be confirmed by a break below the 50-day moving average in FB. Thus we consider the stock a "go to" short if the general market rally fails.
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