The broader averages traded down today with the NASDAQ taking the brunt of the selling. Last week the DJIA took most of the headlines by closing above the 11,000 mark. Unfortunately the NASDAQ didnââ,¬â"¢t confirm the breakout in the Dow and that caused me to have some caution. Todayââ,¬â"¢s action brought more concern as the SOX index broke some minor support.

Feeling that the market is starting to stall, Iââ,¬â"¢m focused on the short side. Cleveland-Cliffs (CLF) has enjoyed a great run over the last couple of years and this is the first time in quite a while that it has shown any sign of weakness. The stock has sold off from the top in early February and bounced off support last week. Notice during the sell-off that volume on the down days were increasing, exactly what I like to see. The last couple of days saw a bounce on volume that is less than impressive. If the lows of Tuesday are taken out, I expect another leg to the downside to take place, possibly attacking the October lows.

Cleveland-Cliffs (CLF)

Even though the DJIA looks like it is breaking out of its trading channel, I will still be a little cautious until I get some validation from the other indexes. Be careful in choppy markets like this and always use stops to protect your principal and profits.

Disclaimer
The article submitted to the Tiger Shark Publishing LLC is presented for informational purposes only and should not be construed as a solicitation to buy or sell securities or securities derivatives of any kind, nor serve as any type of investment advice or strategies. Actual results may differ greatly from expressed opinion. The author expresses a personal opinion and will not assume any responsibilities of the action of the reader.

Tom Incorvia is a swing trader with 18 years of experience in the financial markets.  E-mail him at tincorvia@gmail.com.