Shake It Like a Polaroid Picture (Market Wrap Up 04/16)

The $GOOG reaction after the bell yesterday, the Greek and $GS news today.  All of these excuses were posited by many as the culprit for such a glorious bull run seeing red today.  To be sure, the $GS news affected a great number of stocks in the financial sector, in particular.  However, what I saw today more than anything else were some great, convenient excuses to take profits, as the $SPX fell 1.61% to finish at 1192. Although we pierced and closed slightly below the trend line of the rally since February, keep in mind that in the past two months we have covered a lot of ground, going from around 1043 to 1213.

The good news is that all of those cautious bulls who have been whining about the market being too extended should have some great entry points if we continue to pull back next week.  The first target is the 20 day m.a. around 1180 (we came close to hitting it today). After that, we are looking at a huge retest of the original breakout point of the rally at 1150, followed by the rising 50 day m.a.. Needless to say, the bulls have many layers of defense to back them up before we can come close to saying that the tables have turned in favor of the bears.  Despite the scary headlines today, you have to keep in mind that it has been profitable to buy every single market pullback since March of 2009.

As I noted earlier today, I got stopped out of my $CLNE and $CSIQ positions, and I now have a very high level of cash. I continue to like my $EPAY and $DPZ positions.  My main focus is observing the action early next week with a watchful eye. On any sign of the buyers stepping back in, I will look for long setups.  Today’s action was constructive in helping to sculpt less extended, yet still bullish charts.  As I have said for over week now, having extra cash than usual on hand during earnings season is proper strategy.