Finally, a Stock Market Trading Day the Bears Can Cheer About

NEW YORK (TheStreet) -- The markets finally had some selling on Wednesday as all the major indexes finished in the red. The DJIA was down 102.04 points to close at 16843.88 and the S&P 500 was down 6.90 at 1943.89. The Nasdaq finished down 6.06 at 4331.93 and the Russell 2000 closed at 1166.71 down 6 points.

The last hour of trading pushed the volume in the S&P 500 Trust Series ETF (SPY) slightly higher than the previous two days of trading. But once again the volume is well below its three-month average.

The technology stocks received the money rotation from the hedge funds on Wednesday. Specifically, the social media stocks and the semiconductor stocks where the standouts to the upside.

The Global X Social Media Index ETF (SOCL) was up over 1% on Wednesday. That ETF is well into overbought territory according to my internal algorithm signals which can be found at www.strategicstocktrades.com.

The Market Vectors Semiconductor ETF (SMH) finished higher for the 15th consecutive day. This SMH is now extraordinarily overbought with a 100 number, according to my process. The number cannot go any higher. Are all the hedge funds long that exchange-traded fund? I sure hope so. This is an unprecedented number, never having been here before.

I started a short position in the SMH at the close of trading. A 100 number means it is just a matter of time before it heads down.

So the question begs to be asked: Do we continue down from these levels in the market or do we just turn around and head higher on Thursday? I do not know the answer but the tech sector and the semiconductors are signaling to me that we should head lower.

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