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Since this rally began over 3 months ago, any multi-day sell-off on the NASDAQ was met with a new wave of demand as the market snapped back to new highs. That’s constructive action, and a sign you are in a healthy market, where demand is outpacing supply.
Today’s drop on the major indices is the first time the market has broken this bullish character trait. After last week’s sell-off, my expectation was for demand to fill in. The leaders looked good over the last two days, but reversing all of yesterday’s gains today, just doesn't feel right. The high distribution day counts on the indices are bothersome and after today’s action, I wouldn’t be surprised if we pulled in a bit more. I’m still bullish on this market and most leading stocks are still holding up well. Proper portfolio management says trim risk today, but I’m trying hard to hold my best positions for the bigger move.
Remember this is all for education purposes only. Look at what I’m saying and match it up with a chart. In the end, everyone must do their own research and make decisions that are appropriate for their portfolio.
President, MarketSmith Incorporated.
Follow Scott O'Neil at Twitter.com/WScottOneil
to scott: sorry, i phone glitch....i heard you thanks
Thanks Scott ... your blogs are like a continuation of the IBD Level II course I attended - - I find myself looking for them as I apply the lessons you have already taught.
Appreciate your posts.
I reduced holdings the past two weeks. Scaling out with all stocks sold as of yesterday. I can always buy back if the charts say so. We could easily pull back to the 50 DMA.....preservation of capitol...
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