Stocks take a step back in lighter trade
Stocks took a step back after Friday’s gains as volume slowed across the board. Late day selling slammed the door on the Bulls face as renewed fears over European’s bank health crept back into the market. There were plenty of market leaders advanced today and leaders overall acting well during the day’s decline. Although the market did creep into positive territory the roll-over did not come on higher volume avoiding a day of distribution. Today was a good pullback, we consolidated last week’ stock market advance quite nicely.
There were a few quality leaders breaking out of bases today and showing up in our new long scans. For an uptrend that is consolidating gains is normal and expected. If we weren’t seeing stocks breaking out it wouldn’t be a negative signal. However, since we are seeing stocks breaking out as the market pulls back it is certainly a positive signal in the market.
Today was a light day on the economic front as the Chicago Federal Reserve Bank and Dallas Federal Reserve Bank released a pair of economic figures. Chicago Fed’s activity index fell by .53 while the market was expecting a drop of .50. There wasn’t anything exciting on that front, but the Dallas Federal Reserve Manufacturing index fell much more than expected to a reading of -17.7 when the market expected a drop of 7.0. It appeared these numbers were largely ignored, but we look to the CaseShiller Home prices tomorrow morning along with the Richmond Fed index as well as Consumer Confidence.
Stocks made significant strides last week and a pull back on Melt-up Monday was not unexpected. Although Monday’s have been strong Friday’s move was quite significant and a consolidation of gains is a normal reaction to such strong moves in the market. Over the next few days we’ll need to see continued strength and avoiding any meltdowns from market leaders! It is highly unlikely given the recent strength, but you must keep a watchful eye.
We continue our success here at Big Wave Trading and would like to remind you always keep your losses cut short and your winners run!
Top Holdings With Total Returns Up Today: JKS 138% MIPS 51% RES 37% LGL 34% ASYS 24% ARUN 20% MMYT 19% BIDU 15%
Disclosure: Long: JKS MIPS RES LGL ASYS ARUN MMYT BIDU