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MARKET WRAP UP 12/14/10
While the S&P 500 closed up 0.09% to 1241, the underlying action was noticeably weak in many areas of the market. At some point, the extended daily charts of the leading indices and sectors need to take a rest. Today, perhaps, marked the beginning stages of a very short term pullback. The high momentum names saw some real weakness today, and the fact that the broad indices provided a thin veil is somewhat troublesome for longs.
As easy as it is to infer from today’s action that swing shorting is the way to go, I still remain in the camp that the risk/reward profile simply is not there. With all of the “cautiously optimistic” bulls out there, there is likely to be a strong underlying bid to the market after a 2-3% pullback. Thus, you had better be nimble with any countertrend bearish bets.
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