Markets initially rose Friday on an unemployment report that showed sluggish wage growth and lower than expected jobs creation of 209,000 vs an expected increase of 235,000. Unemployment rose to 6.2% as a reflection that more people were entering the work force looking for work, which could be considered a positive, compared to the number of people who were dropping out of the workforce as reflected by the dropping unemployment rate. All this was taken as a positive that Yellen would have to keep interest rates low for an unusually prolonged period.

Nevertheless, markets closed down. When good news hits but markets can't rally, that is a warning shot across the bow. Major averages are currently trading either under their respective 50dma or 200dma. The number of distribution days has piled up and many leading stocks have been hit hard, so on a price/volume basis, this would indicate lower markets ahead. That said, QE markets have an infuriating way of finding their floors when least expected, then eventually moving into new high ground. But is the growing divergence between the pronounced weakness in the Russell 2000 an ill omen much as it was in late 2007 when the big bear began? Also, the level of complacency in the large number of bulls vs bears is at dangerously high levels. Finally, market breadth overall, which is to say seeing price/volume of all stocks as a whole, and not just leading stocks, has been hugely divergent relative to the S&P 500 when it has been at or near new highs.

The ensuing weeks will show whether markets can repeat history like the broken record they've become by moving into higher ground, resuming the uptrend, or whether this time, the rally/bounce will be notably weaker than past rallies. In such an instance, short sale set ups would be plentiful, thus provide profitable shorting opportunities. For those who prefer to go short by utilizing ETFs via the MDM or stay in cash, there is nothing wrong with either, as cash can be king when markets are tumbling.

Keep in mind the market remains tenuous with major averages under their 50dma and 200dma in the case of the Russell 2000, so position size accordingly if you decide to trade anything on the long side.