Both Cycles Headed Downstream

In Recent days, the stock market has been shifting downstream. A light is emerging at the end of the tunnel but it all looks red to me. In the past two weeks, I have shifted my focus from buying equities to shorting the Nasdaq. I believe that earnings have been slowing down, showing the overall slowdown of the economy. My theory why the Stock market has been rising almost to 14,000, was because the fear of the housing market. All the people involved in the housing market shifted their money to the Stock Market. But, now what? With both the housing market and Stock market in a downtrend, where do we look for growth? For right now, the best advice I can give is that you should find specific stocks that are expanding, but even then interest rates could hurt their expansion. I believe we will see red for a while and in the best case scenario, Sideways action from the equity market.
Stock Favorites: JMBA, trading at 7.15, QID and DNA