Into the Valley

The catalyst du jour for weakness in equities may very well appear to be the Yuan devaluation by China's powers that be in their command economy. But negative divergence and narrowing momentum have been brewing for quite some time making for any bit of shocking news to market much more of an excuse for a sell-off rather than a catalyst.  

Plays like BABA and SUNE are taking high-flying momentum traders out back this morning, along with violent downside follow-through to failed breakouts like GPRO from Monday. 

I see more and more market pundits and players are starting to preach defense, but that is probably after some unnecessary drawdowns have occurred. Inside Market Chess Subscription Services, we have stayed levelheaded throughout this messy market action in recent months, opting to remain tactical and practical for hit-and-run trades, rather than swinging for the fences and risking too much for modest rewards. 

Despite the market down further this morning, there are still some intriguing short setups, individually speaking, if the market stays down.

Names like COF INTC SHW are nowhere close to being technically oversold, for example.

For now, markets are flirting with going down into the valley, as the Nasdaq is the only major index currently not below its 200-day moving average.