The market had a 14%-15% or so move off the August lows, and now everyone starts crying when there is a 2%-3% pull in! A bunch of spoiled bulls, I tell ya. I guess it is just human nature to react more emotionally to losses than gains.
If you read my notes starting on Tuesday after the close, I stated we should see a re-test of the 1197-1202 S&P break-out. Today we touched below and held the 21-day. If we can pull into 1155-1160 and hold above the 50-day that would bring us to the 38.2% retracement of the move from 1040 to 1229. If that were to happen, I’m sure the entire “Double Dipper” crowd will start screaming.
Strong markets usually show commitment when they test this area and hold. Many of the stocks we list often broke down from their upper ranges, so they likely won’t see new highs anytime soon. While the ideal trade for the last 2 1/2 months has been to be balls-to-the-wall long, as David Tepper put it, that doesn’t mean things can’t change a bit. We are still bullish, but a modest correction would be healthy action as long as everyone keeps their heads.
Everyone have a good weekend.
