The Dow finally ended it’s win streak as the Dow fell 77 points. Small caps led the decline, but we still remain in an uptrend. One day of selling does not make it a trend. Profit taking on extended stocks proved to be a wise move. We can always reload at proper levels. Volume a higher across the board notches no a distribution day. We will need to see a few more with stocks showing weakness. For one, we do see stocks remaining in proper patterns. This may change over the next few days. However, we can only trade what we are given. If we slip further we will need to see our end-of-day holdings hold key levels.

Semitment changed slightly week-over-week with Bulls slipping and Bears inching higher. Bears jumped to 26% despite the in streak on the Dow. Bulls slipped, but remained in the mid-30s while neutral respondents remain on top. Given the market rally you’d think those who were neutral would jump on the bandwagon. Nope! We can’t say we are surprised given how sentiment readings have gone since 2011. Even since 2009.

We are overbought and perhaps we may consolidate these gains. It would be nice to setup this market for a tremendous uptrend in the fall. Summer trading has been quite interesting especially after brexit. Remember the world was going to end with the “Leave” vote? What a long way we have come.

Stick with the process. Exit when necessary and keep position sizes in check. Have a great weekend!