Good Morning, Traders. And still the bearishness continues. The markets continued lower yesterday on yet another increase in overall volume, so throw another distribution day into the tally. Long-time readers of this commentary and regular viewers of the ShadowTrader Video Weekly are probably not surprised as this weakness has been talked about for the better part of a month now, at least. The Nasdaq Composite has been showing relative weakness all year long and continues to lead the markets lower, yesterday being no exception. Ahead of the Dow and S&P, the tech index once again set new lows for the year. Every single group in the my sector list was bearish today with Oil Services and Coal taking most of the heat and off more then 5% from the open. There is little to report here, other than the bias is getting firmer and firmer to the downside. Near-term and overall bias is down for all markets now.

 
LGF - Lions Gate Entertainment
Industry - Movie Production
Side - Long
Trigger - 9.45
Stop - 9.02
Target - 10.00
Timeframe - 3 days to 2 weeks

Notes

• Stock has recently broken a downtrend showing some relative strength in this weak market.
• Bullish hammer formed on bearish day confirming that there is interest in this issue.

AXL - American Axle & Manufacturing


Industry - Auto Parts
Side - Short
Trigger - 16.29
Stop - 17.83 / 17.30
Target - 14.00-
Timeframe - multiweek to multimonth



Notes

• Trendline break play off of recent weak bounce on weeklies.
• Check monthlies (not shown) to see how recent support has been broken and now stock wants to move to next pivot of support which is in $12.00 area.
• Target listed is below recent swing lows but as mentioned stock could move freely much lower for long-term play.
• Two stops listed, one over last weeks high, and one over this weeks high. Choose your own adventure and set sizing accordingly.

Peter Reznicek is the Chief Equity Strategist and a principal of the Prana Fund, a domestic hedge fund, and ShadowTrader, a subsidiary of thinkorswim which provides coaching and education to its clients on both intraday and swing trading of equities. For a free trial to the full version of The Big Picture or to learn about ShadowTrader's other services, visit shadowtrader.net or send an email to preznicek@shadowtrader.net.