Historically corrections of 5% occur on
average of 3 times per year. Of the major indexes that I follow,
only the NASDAQ-100 pulled back to this level on a closing basis and
much of that has been erased with today's 1.41% up move. Using GMMA charts of a few of the major
indexes I follow shows that this has been an orderly pullback and
although the major long term moving averages have squeezed, they've
yet to roll over to the downside.
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| GMMA NDX |
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| GMMA COMP |
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| GMMA RUT |
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| GMMA SP |
In general my current bias is still to the upside until the market confirms otherwise. Besides retail showing sector strength there are a number of charts setting up nicely, something I typically don't see when there is an erosion in the overall market. The one caveat I've had as of late hast been a breadth signal I use which has been neutral due to a lack of buyers or sellers. Now that earnings season is gearing up this week I'll be looking to this indicator to support my views that there is a buying opportunity here on a swing term time frame. Until then I'll take some shots with smaller positions and wider stops.
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| 10 Day Buyng/Selling |
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