For the third straight session stocks closed in the red and for the second day in three notch a day of distribution. Today’s distribution makes for 7 and should raise at least a yellow flag for the overall market in general. Aside from the distribution there were quite a few leading stocks acting well and a few breaking out. It will be important to see these breakouts continue pushing higher otherwise failures will confirm the high level of distribution. While today’s distribution on the S&P 500 and Dow Jones Industrial average was relatively quiet we still must take into account it was distribution. Selling during the last hour of trading was not kind to the stock market bulls. We still remain in an uptrend, but we do have some caution being thrown to the wind. Pay attention to your exit strategy and act accordingly.
There were quite a few breakouts including YELP, P, and Z. A recent breakout in YY acted relatively well, but we’ll need to see it continue to push higher. FONR added to its gains with a powerful move today. Strong stocks usually continue to act strong and it is in our best interest to stay the course. BAC continued to add to its gains, but appears to be a bit tired and we wouldn’t be surprised if the stock took a rest as a natural reaction to the recent move. FB rebounded after a quiet week last week in decent volume although below average. TWTR found support at its lows today and continues to hold the 12/30 low. The stock continues to digest its move out of its IPO base. We have enough leadership for this market to recapture all-time highs it is a wait and see game.
It will be interesting to see how this market moves into the Friday’s first job report of 2014. This is not a big deal to us as we care about how price acts. However, it is a much bigger deal for those who are watching what the Federal Reserve may or may not do. On 12/18 we received news the Fed was going to begin tapering and the market reacted strongly. Will it continue to cheer on better economic data? I wouldn’t hurt your noodle in trying to figure it out. Price will always be a guide and simply paying attention to it with a risk management strategy will yield you enough gains.
The first full week of 2014 and we can’t seem to shake off the selling in the general market. Perhaps tomorrow will be different. Ride those winners.
