Late Day Reversal Raises Short-Term Red Flags

The markets gapped higher in the morning, trended higher all day, and then suddenly reversed on a broad pickup in volume near the end of the day. The markets all ended basically unchanged from down .1% to up .3%. Volume on the Nasdaq was up a little and NYSE volume was lower. But the volume picked up on the downside, as the markets fell late in the trading day.

It was an ugly close but we need the market to pullback if we want the uptrend to remain healthy. Pullbacks is what allows the bears to come out of hibernation and start with the "top" calls. And boy did they do that today. I heard the "top" called a lot today! That is good news, to me, as any further price erossion should convince bears the "crash" is soon to come.

Unfortunately, for them, there are a lot of nice charts still and some new fresh ones popping up in the Precious Metal sector. However, some charts have started to show some distribution. But, overall, most charts remain very green and in solid uptrends. Internet, Computer, Software, Medical, Banks, Insurance, Metals, and Transportation sectors are still the leaders and most of these stocks still look great.

Hopefully, you have been locking in some gains so any reversal that could happen doesn't eat away at all your hard earned profits.

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