Chop chop chop
Every time the market has rebounded from corrections in last one year, it has had V shaped recovery.
It reverses and just keeps heading high for 2 to 3 weeks before running out of gas. But this time rebound is not leading to follow through. So we have settled in to choppiness.
The choppiness is leading to wide ranges being formed on number of momentum stocks. Wide ranges do not tend to lead to successful breakout. A orderly pullback is good, but when large number of stocks show choppiness it is not a good sign. Next market advance will if it happens will be lead by even narrower set of stocks.
Fading of strength and breakdowns near recent high continues to be the theme. For tactical short swing trades those offer some opportunities.
Signs of distribution are clearly spreading in more stocks , DFS, TRV, CB, ACE, and ICE shown below are good examples of that.
High volume selling near recent high is what I see on many stocks. They may not follow through immediately, but after few days, they will at least revisit their range lows.
At this stage I am defensively positioned. Couple of stocks like GOOG, AAPL, and PCP are in good pullback mode and I am watching them for possible long plays in year end rally.
It reverses and just keeps heading high for 2 to 3 weeks before running out of gas. But this time rebound is not leading to follow through. So we have settled in to choppiness.
The choppiness is leading to wide ranges being formed on number of momentum stocks. Wide ranges do not tend to lead to successful breakout. A orderly pullback is good, but when large number of stocks show choppiness it is not a good sign. Next market advance will if it happens will be lead by even narrower set of stocks.
Fading of strength and breakdowns near recent high continues to be the theme. For tactical short swing trades those offer some opportunities.
Signs of distribution are clearly spreading in more stocks , DFS, TRV, CB, ACE, and ICE shown below are good examples of that.
High volume selling near recent high is what I see on many stocks. They may not follow through immediately, but after few days, they will at least revisit their range lows.
At this stage I am defensively positioned. Couple of stocks like GOOG, AAPL, and PCP are in good pullback mode and I am watching them for possible long plays in year end rally.
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