Something tells us next week …

Bottom Line: The OTC comp..first of the majors to give us some down …the RUT is close behind…as the strongest give way to that last gasp by the weak laggard. It really says rotation is in full swing. This is something all too common before the weight of the overbought tape starts to give in.

Nothing special about the internals (light volume and flat breadth) today. The key to the session was another intra-day selloff that sets the stage to excite the short seller. If we fade again early next week, expect them to try and press it lower.

We think $1155 on the SPX should be where the dip buyer gets interested.

We were active today…selling short TECD and CMG. We also bought partial positions is ISRG, OTEX and NOK. We also booked in nice gains for NIHD, CMA and HP.

Our trading portfolio (not including currency or sector ETFs) now has 9 longs and 12 shorts, which we think is a pretty good balance. Our sector ETFs have a bearish bias since we continue to think the tape is closing in on a trading top of consequence.

Check back with us early and often over the weekend, as we update our COT based Trend model.

Something tells us next week (the end of the month and quarter) isn’t going to be a quiet one.