However, when the selling abates, risk/reward could favor those with the fortitude to be long ETFs like FDN and PNQI.

“We’ve seen a fair amount of selling in the names that make up FDN and its possible traders aren’t done shedding shares. But it appears that with the current set of price data, the risk/reward favors a short-term bounce as price holds its long-term moving average before sellers will get the opportunity to take back control. We’ll see where price takes us,” said Thrasher.

 

Chart Courtesy: Andrew Thrasher, CMT

Tom Lydon’s clients own shares of Amazon and Facebook.