Trade Idea-XLK

Technology stocks are getting hammered along with everything else, but this is a sector you should have some exposure to on the short side, whether it be XLK or individual equities.

 XLK has broken down from a top here. Check out the volume-this is massive deleveraging.

 When we get a top break with a daily negative divergence, rarely do these come back.

 Today XLK's 1 min 3C divergence looked a lot like the IWM's which was by far the best performing average.

I'd use any strength to get into this position short, the stop is in the white box, I'd short it right up to that stop.

Looking at the market tonight and the bellwether stocks, there has been a major dislocation, the one we've been expecting. Events are now moving so quickly that the market is having trouble knowing how to discount them, in other words, the market is starting to spin out of control. By now you should have short exposure, adding on strength and keeping cash on th sidelines for countertrend opportunities.

Tonight's dominant price volume relationship was close down/volume up-we knew it would be the heaviest, but dominance is what we look for. This should create an oversold bounce, if it doesn't, we know that the situation has changed, the worm has turned. Watch carefully how the market reacts to news. At some point, the point of no return, the market will react badly no matter what the news. That will be a sign that we are exiting the volatility of the top and moving into a bear market down trend, trading will be more profitable and believe it or not, a lot easier. Don't fight this market.