Disappointing new home sales and a preliminary look at US manufacturing PMI from Markit did not help the bulls cause today. For much of the session stocks remained in negative territory with the NASDAQ taking the brunt of the selling. The positive on the day is we did see volume drop and it gives an indication we didn’t have loads of institutions dumping stock. Even if we do move higher given the backdrop from bloated valuations and lack of fear how high can this market go? This current situation is precisely the reason to have a plan in place of how you will react to the market. We still await a confirmation of a rally or a breakdown, but it is clear choppy action is likely to stick around.

Another Business Insider headline reads:

2014-04-23_skyscraper_headline

And here is the index:

2014-04-23_skyscraper_index

It is crazy to think a skyscraper can mark the end of a stock market rally. You can make the same argument with magazine covers. However, it doesn’t mean their timing is any good. There are plenty of reasons to be a bear here: low VIX, lack of bears, too many bulls, price-to-earnings multiples are high and now we have skyscrapers. Things are beginning to line up to where when we get price confirmation it is an all-out assault on the short side. In the meantime, if we do get confirmation to the upside we’ll take advantage of what little scraps there are left for us to nibble on.

Next week we’ll get all the fireworks with the Federal Reserve, PMI readings, and Friday’s job report. Anyone’s guess as to where the market will be, but we do know it will provide us with some entertainment. In the meantime stick to the plan and execute.