Market takes a breather | stockbee

10/21/2010

Market takes a breather



For past few weeks market was in a relentless rally mode with very few down days. The breadth readings were in extreme territory for many days. 

In last 3 days we have seen first serious bout of selling. As a result of this selling the cumulative breadth ratio has dropped below 2. 

The kind of breadth thrust we witnessed in last few weeks is the kind of breadth thrust typically seen at the beginning of a long lasting bull move. 

After such breadth thrusts market typically correct or go sideways for few days to weeks and then buying tends to resume. 

In the short run the picture might be cloudy but in few days or week the breadth trends will make the likely market direction clear. 


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