We had a bit of a relief bounce going this morning. But as I write this the Nasdaq and S&P 500 are flirting with going red. I am mostly cash here, with some select shorts, looking for recently extended charts to firm up before hopefully giving me a chance to load up on the long side again. Trying to time when that will happen is anyone’s guess, though the increased volatility and wild price swings need to abate first before charts can consolidate tightly.
Financials and small caps, two of the main leaders off the November 2012 correction lows, are lagging again today. Even the stocks and sectors staging seemingly strong bounces today, such as the XHB Homebuilder ETF, are still printing “inside days” when compared to yesterday’s massive price range.
I still do not expect the uptrend to unwind all at once and morph into a cratering bear market. However, the character of the market has undoubtedly changed in recent weeks, particularly from the high energy breakouts in many stocks in January to the lethargic grind higher in February, which we know gave way to some heavy selling and increased volatility.
As far as the next few days are concerned, I am in doubt, so I am largely waiting it out.
http://www.youtube.com/watch?v=W08ZfQClC0A
