The pullback occurring on the major indices over the last three sessions occurred in a very smooth manner. Compare it to the pullbacks occurring during the early summer months leading up to our most recent advance. The character of this pullback is defined by steady rotations, overlapping price bars, shorter “candle wicks”, and tighter daily ranges.
Tomorrow and Monday will be critical to the pullback we are experiencing with Monday having a higher possibility of producing a gap. If we continue to see this type of less violent price consolidation, it could stage for a healthy leg higher. “The Fly” is cautioning us about a September surprise, and investor sentiment is cautious at the least.
Should we see price stabilize and attempt another leg higher, I will put more cash to work. At today’s close I bought back my Expedia position. I think the EXPE chart exemplifies the price action I want to see prior to a thrust higher. Should the market rise it could be entirely reasonable for EXPE to do likewise.
Stupid trade of the day: buying the highs in WFM. I may close this position out tomorrow should this bearish momentum continue.If you enjoy the content at iBankCoin, please follow us on Twitter