The Bears Are Coming Out Of The Woodwork Already?

Random Thoughts

The Ps (S&P 500) had their first meaningful down day since their recent breakout.  For the day, they lost .71%. So far though, the recent down move has been an orderly pullback. In fact, they look poised to resume their recent uptrend.

Shorter-term the Quack (Nasdaq) looks pretty good. So far, it has only corrected its recent leg. Said alternatively, it has pulled back. Unfortunately this pullback is shy of the previous highs. Ideally, I like to see markets blast past their prior highs, not look back for a while, and then have an orderly pullback.

The Rusty (IWM) also looks okay shorter-term but it has too has stalled short of its prior highs.

It’s amazing the amount of fear mongering that occurs after just a couple of down days.

The bears are coming out of the woodwork. Predict early and often I suppose.

It’s not the end of the world.

You can’t completely ignore the action though.

Retail got whacked pretty hard. It is wide-and-loose (at best).

Some areas that were recently breaking out such as Airlines, Manufacturing, and Aerospace/Defense have come right back into their prior ranges.

On the plus side, Energies banged out new highs with some vigor. Also, the Gold and Silver stocks continue to wake up. We could see opportunities here soon.

So what do we do? I think the play pretty much remains the same. Even with the pullback that we’ve seen in in the overall market, I’m still not seeing a whole lot of meaningful setups just yet (okay, I did have 1 short that I liked). So, the database is saying wait a little longer. Usually, it pays to listen. As I’ve been saying, it this market can mount the next mother-of-all bull legs then there will be plenty enough time to get on board. For now, continue to sit tight. Honor your stops on existing positions.

Futures are flat to soft pre-market.

Best of luck with your trading today!

Dave