We are working through another moderately soft morning in the market, with the Nasdaq lagging and down roughly 0.50% at the time of this writing. The transports are still pushing higher, exuding strength we have not seen out of them in quite some time. As we have grown accustomed to, the small cap and financial stocks are showing relative strength and essentially flat on the day. I am not in a rush to increase long exposure here, given the general consolation theme was have seen the past few days.
Inside 12631, I sold out of my Facebook long yesterday to protect the win with the company making a highly-anticipated announcement today. At this point, a “sell the news” reaction, perhaps after an initial pop, could be in the cards. Ultimately, though, I am looking to reenter the stock down the road.
I am also seeing plenty of talk about the recent inflows by mutual funds and the retail investor (or the “little guy”). While I agree that bull market tops are formed when the retail investor becomes very confident in the market, it also can take much longer than you might think. Working towards a top is far different than being precisely at the top. I have little interest in missing out on bullish price action merely because we might be working towards a top, without much else technical evidence to support that.
That said, I am pretty much looking at charts and not doing too much in terms of trading until this consolidation looks to have run its course and the bulls arrive for another push higher. The persistent Apple weakness has yet to work for the broad market in the way the bears had hoped. Let’s see if that continues.
