The day was riddled with bad news but the market with stood it all until the end. Housing data is bad, really bad. For it to go down after last months signals that it was turning around takes the wind completely out of the sales of the bulls. The market did not react, but it will. Home builders will be taking a dive soon. XHB and ITB are good shorts right now and are about to cross the 50 dma. You may have to stand inline though to get your short shares.
To top off the day, HP's numbers were not good. Just as the optimism for housing numbers were spoiled to open the day, HP's numbers were certain to beat expectations according to pretty much every analyst you heard from the last 2 days. Yet, they blew it. This will have rippling effects on the NASDAQ and will cause the DOW to surely shed a good amount tomorrow since HPQ is a Dow component.
AXP is another great short right now. Their announcement of 4000 more layoffs was attempted to be spun as good news by the media but the attempt failed and AXP is now about to fall below the 20 dma and its 20 and 50 dma's are starting to converge. I see AXP at around 17 in the not-so-distant future.
All this said, it is not time to throw all your chips into the short pot. The VIX remains well below the 20 dma with no signs of life. Until the S&P goes under 875 and the VIX goes above 35, caution and trading should prevail.