ORIGINAL POST:

Stocks are off to a modest sell-off.  The RUT continues to move ahead of SPX, trading below the SMA 10 and 20.  I’m adding an additional 150 shares to my model portfolio which, as of yesterday’s close, looked like this:

Some of the charts I’m watching…

RUT has broken its rising wedge and completed a back test of its RSI TLs.  I’m comfortable adding to my shorts.

SPX looks like it’s breaking down on the daily chart.  Looks like a back test on RSI…

But, the 60-min chart shows the importance of watching a variety of time lines.  I’d want to see a break of the red RSI TL before adding to my modest shorts.  In a normal market, I might not be quite as cautious, but this melt up has faked us out too many times to throw caution to the wind.

TZA with a solid break of its TL.  Tiny little back test, we might see more…

Oil is taking a breather today, with CL off 2.37 at this time.  I might be tempted to pull the plug and take the remaining profit, but look at the 60-min chart:

The decline was only to the bottom of a well-defined channel, and the RSI depicts a back test (of the yellow trend line) — albeit a deep one.  I’d like to see prices climb back above the red TL in order to maintain the medium-term uptrend.  As I mentioned when I put the position on, the price channel will be my guide.

On the high octane side, AAPL is hanging onto a slight gain, while NDX itself is flagging.  AAPL broke through its weekly rising wedge, but the monthly chart is still hanging on, with obvious negative divergence on all time frames.

NDX, currently at 2641 is looking good for a reversal around 2687-2696, the confluence of two crab patterns and a rising wedge and on negative divergence.  The RSI TL on the daily chart is showing signs of breaking down.

More after the close.

Feeling bullish?  Excited about auto sales after headlines like these?

Take a closer look.  From GM’s own investor relations website:

Notice the 3.9% year-over-year decline from Feb 2011?  How about the 2.2% decline versus ytd 2011?  They’re made all the more negative when you consider the channel stuffing going on.  Channel stuffing, for those who aren’t familiar with the term, is forcing sales through dealer channels even though there’s no demand for them.  It’s deceptive.  Period.

And, lest you think this is an aberration, check out this very telling Zerohedge chart reflecting GM’s growing inventory:

As they say, a picture is worth a thousand words.  Although, if GM were in charge, it would be worth two thousand (but dealers all over the country would be holding clearance sales on them, come December.)

Dig into the numbers a bit, and the 30,410 fewer vehicles sold ytd in 2012 versus 2011 is positively dwarfed by the 150,096 increase in inventory since a year ago.  The month-over-month increase of 2,278 vehicles was crushed by the 47,641 inventory increase.

I get tired of saying it, and you’re probably tired of hearing it, but financial reporting has become largely a confidence game.  Companies like GM have no compunctions about blurring, shading, or even outright lying about their results.  And, the mainstream media has absolutely no problem reporting this crap as gospel.

Why?  Because good news is good for markets.  And, strong markets are good for bank, brokerage and investment banking profits.  You know, the same guys who buy all those ads in the WSJ and on CNBS.  Even (some would say “especially”) our government encourages this outrageous conduct. Rising markets virtually guarantee reelection; it ain’t folks who emptied their 401(k)’s to pay the rent that contribute to campaigns.

The SEC used to care, and would occasionally prosecute someone for lying to investors.  Now, it’s up to the blogosphere, fringe guys like me who are drowned out by the incessant bullish drumbeat of the Murdocks and Buffets of the world.  

Like all good soothsayers, I take this responsibility seriously.  But, there’s just too much for one person to keep up with.  So, check Zerohedge, ShadowStats and Mish daily.  And, ignore us tin foil hat wearers at your own peril.  As Julius himself would tell you, better safe than sorry.

Stay tuned.