Market pulling back a little
Just a little not much.. This the intraday chart on SPX, please click to enlarge.
The market is certainly pulling back here and the upside momentum is on hold. SPX is down 12 points and RUT down 11.5 at this writing. The stochastic is showing a curve at the top in lower pane on daily charts, and the general market is trading to the downside for the time being.
This is what we wanted to see, some kind of let up in this strange run. This is a healthy thing to have where profit taking takes place and new buyers stream in bringing the market back up again. If this did not happen the market is subject to a major sell off and that could damage charts and block entry for some time.
However the leaders are still up. They are showing few signs of letting it go. AAPL, PCLN, CMG , ALXN are all holding on to their gains despite the weakness in the general market. Its called divergence and it happens.
We may have missed some of the milk run in the last week, but if this market pulls back a little more they may provide good entry points because they are sitting at nose bleed territory. Specially AAPL chart has become parabolic and is offering the shorts to take a swipe at it and sell it off. We cannot say this will happen or not but it increases the odds.
Lately the market is shrugging off bad news. The existing home sales came in low and the market did not sell off. It is these things that have kept the momentum up and has not resulted in any major pull backs yet.