Market Preview: March 2

We are starting to see some divergences in the breadth indicators, but for the moment the odds favor another move down. I'm short a couple of financial names that popped over the past few days. I am also long a couple of technology names that I might have to let go if we get a breakdown in the market.

S&P 500: Weekly
I was expecting some type of bounce last week after breaking down, possibly back up to the 800 area. We simply didn't get it. Some of the oscillators moved out of oversold territory while the S&P did nothing. That is not a good sign. With that being said, it is very likely we could see a "snapback" rally that could burn all the bears, so make sure your stops are in place.

S&P 500: Daily

iShares Regional Bank ETF (IAT)

The Financials look like the best names to short right now. Everything else is pretty far extended to the downside and is too risky for me to mess with. If we do end up getting any type of pop, I would look to short some of the laggards. Even though the breadth indicators show signs of potential strength, we're still in a bear market. All trades should be biased towards the downside. Playing strength on the long side can work, but it can also burn you. An example of this is what happened to Health Care last week.

Health Care (XLV)

One last thing I want to touch on is Gold. On a long term basis I am very bullish on Gold. The debt that America is taking on is going to cause very high inflation in the future. In an enviornment of high inflation, investors often flock to hard asses such as Gold. At this point in time though I think the recent surge in Gold is due more to the flight to safety. T-Bills have stopped falling in price, which means investors are losing that confidence they had a couple of months ago. Gold has pulled back over the past week, and I'm looking to enter between 890 and 935.

Gold