Morning Strength Filled with Tension

After a strong open, equities are coming in off a recessionary (sub-50) ISM Manufacturing Index number. It is likely we are seeing the market look to shake out as many players as possible before it eventually commits to a new direction. In the meantime, as we have for a while now inside Market Chess Subscription Services, the key is staying tactical and nimble, minimizing losses and not over-extending yourself in a whipsaw market. 

We took advantage of the sharp morning fade just now to take partial profits in the LABD long from yesterday's entry, the triple-bear ETF of the XBI for the small/mid-cap biotechnology issues. Indeed, I would argue that the small caps (IWM) and biotechs at-large likely hold the keys as to whether the current market will indeed succumb to the many negative divergences present, or instead conjure up some holiday cheer for a rally into Christmas and then 2016.

Finally, with JOY gapping down huge, another "tell" which has served Members well has been to wait for that large coal machinery play  to first put in a bottom before even considering the likes of ACI BTU CNX as bottom-fishing plays. So while ACI BTU CNX are green today, and that may indicate some type of positive divergence, I would still show that extra bit of patience and wait for JOY to, at a minimum, stop going down first.