After a long holiday weekend those who were back in the office were sellers of this market today.  A debate will certainly rage over whether today will count as a distribution day or not.  We’ll count it as such, but we’ll need to see more evidence this market is about to kill its latest uptrend.  Volume is the main culprit in the discussion as we are comparing against Thursday’s holiday shortened session.  We will know later whether or not this will be a turning point in the market.  The final hour of trading was pretty quiet.  Lots will be calling for this uptrend’s head, but we’ll stay patient in our process and continue to push forward.

There are always bright spots where most people see darkness.  PCLN is a big institutional stock big growth funds love to own.  While not over-owned the stock still gains quite the attention when it moves.  Its current base is an improper cup with handle pattern and the current handle building process is in place.  As it moved through 1240 could have been your first “cheat” buy, but its proper handle breakout has yet to come.  Many will shy away from a stock with its 4 digit price.  Do not let it fool you as these big price stocks can move and can move quickly.  Stick with quality leadership. PCLN is one of those leaders.

TSLA was another favorite, but it has run into a bit of trouble over the past few trading sessions.  It would be wise to follow your set of rules when it comes to sells.   The stock still is hanging onto its 50 day moving average.  Often times these stocks will pull back quickly and shake out longs.  FB and GOOGL are two other stocks to keep an eye on.

Wednesday will likely be an interesting session with the Federal Reserve releasing its minutes from the most recent meeting.  Many will make a big deal over when the central bank is likely to raise its benchmark rate.  There are so many estimates and so many opinions it is utterly useless to guess when.  Pay attention to the yield curve and when the short-end spikes you will know we are close to a probable significant turning point.  Keep a close eye on inflation as this will likely be a catalyst at the long end of the curve.  Better yet, just pay attention to TLT and you’ll know when higher yields are coming.

Second quarter earnings season is now upon us and we’ll begin to get our flood of earning reports shortly.  If you get nervous ahead of earnings reports it is likely your position sizing is wrong or your cost basis is too high.  Buying properly is important and should not be done by shooting from the hip.  Be deliberate and patient.

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