Markets fell for the third straight session Wednesday, demonstrating very weak action. The benchmarks everyday this week have closed near their lows for the session, a bearish characteristic. Three days losings streaks have been very rare this year so far with the big YTD gains. On the S&P 500 that has occurred only 6 times so far. It is too early to tell, but with 60% off the week in the rear view mirror, the S&P 500’s 6 week winning looks in jeopardy. It now stands down 1% for the week. The Nasdaq is closer to 2% lower on the week. Are investors becoming to complacent in buying the dips? Bearish advisers total about 15%, which happens to be a 5 year low. This can be considered a contrarian indicator with pain to follow. Looking at some groups, energy continues to have issues and looking at the XLE it has bearish traits. It is sporting big distribution and is in the middle of a bearish rising wedge pattern that can be shorted below 86. Conversely the energy dependent nation of China rose very nicely Friday jumping above a bullish falling wedge pattern with a 38 trigger. It followed through Monday after as some say the most pro growth economic reforms in years were announced. Those 2 days alone were responsible for 8% gains, but notice how it was unable to CLOSE above the round 40 number both Monday and Tuesday. Chinese stocks however failed to mimic the ETFs big gains. SINA for one is down 8% this week so far. NOAH has fallen close to 18%. Stick with leaders exhibiting good charts and relative strength like BIDU down just 2%.

This article requires a Chartsmarter membership. Please click here to join.