How's that for a flip flop from yesterday? The S&P 500 has been up for almost 7 days in a row (last Friday was down just a fraction) and the Nasdaq up 10 days in a row. We are due for a pullback. Today's price action was weak for most of the day. The candlestick patterns, the divergence in the technical indicators, and the consecutive up days point to a sell off coming. Bernanke's remarks must also be part of the equation. The question now is how much it will sell off? I took a lot of profits going into the close today. I will wait to see if the market pulls back...and if it does, how it pulls back. I'll go back to my remarks yesterday...if the S&P 500 closes below the 10 day moving average, we could be in for a bigger pullback...or at least a more sideways trend. If the market pulls back a bit and the buyers return, we could continue this remarkable run. I will watch the earning coming out in the next few minutes and see what the futures look like tomorrow before the market opens. If the Apple earnings are great, we might gap up at the market open. If we do, see if the market can push higher. If it can't, we will probably start to sell off. Wait on getting into new positions. Look to take some profits tomorrow (if you haven't already done so) on any remaining positions. You could hold on to a few contracts in case we move higher tomorrow...just don't risk a large amount. I still think this trend will continue, but it might pause a bit in the short term.
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