Fascinating action in
Weight Watchers Int'l (WTW) today, which had broken down on heavy volume last Friday and looked for the most part to be a late-stage failed-base in progress rallying up to resistance at the confluence of its 10-dma and 20-dema. In this market, however, the short side has been a low-probability play, even when the set-ups look like they are textbook.
Things change quickly and we frequently see the "Ugly Duckling Principle" come into play when things look, well the ugliest. Note that Friday's high-volume breach of the 50-dma by WTW turned into a supporting pocket pivot coming up through the 50-dma today. Such is the nature of a QE market. WTW closed 31 cents above its 10-dma, which was our guide for an upside stop on the SSS play. Could this reverse to the downside again? Perhaps, but it may be that the upside momentum in the market today created a situation where trying to short
anything was essentially like trying to swim against the tide.
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