[isatrader]

1) Since the data shows the US in a Stage 3 and we should be acting "more defensively"... I have three major positions (holdovers from IBD) that have under-performed (one's down 4% and the other's down 9%). My conundrum is that both have broken trend but neither have violated the 30 wma (although my gut tells me that it will happen soon enough with the way the market is going). In your opinion, would you hold and wait and see what happens or cut ties, take a loss, and move forward?

I don't really want to interfere with your open trades. All I'll say is that I think Stage 3 and Stage 1 are the most volatile, which means you can get big swings in either direction, especially in the early part of the transition from Stage 2. So we could get a sharp drop and then an equally sharp rally, and whipsaw back and forth. All you can do is look to how your individual positions are performing compared to the market action and make your judgement based on those.

The key thing that I look for is volume, as if the pullback in the stocks isn't showing a contraction in volume as it should in a normal reaction, and is instead heavier volume than the recent up moves then it would be of more concern to me.

2) As to the post above re: the Stage 3 & deteriorating US sectors, I cross-referenced your post of shorts from the weekend with the sectors and the best short candidates (CIR & PNR) are in the same Sector/SubGroup- Industrials/Industrial Machinery... Would it be ill-advised to short two positions in the same subgroup? ADNC also looks like a good candidate and is in Technology sector, but I'm not sure my broker will let me short a position under $10, so that one might be out.

I think you should compare the two directly to only pick the best candidate, and also study the rest of the group and see if there isn't a better option as well http://stockcharts.com/freecharts/sector...DJUSFE&V=W