After an outlier “V” shaped move up, we are starting to feel that signs of a pullback are close at hand. We are not suggesting anything disastrous but a few percent would go a long way in setting the charts up better. It would also give us a chance to decipher real strength.
A few things are occurring at the same time.
For starters, we are seeing some churning in here. This is an absense of progress as the markets trade.
Secondly, bullishness is now higher than it was before the recent topping process which may indicate everyone who wanted to buy have already bought.
Lastly, and this is just something we believe in…BIOTECHS look to have topped. Why does this worry us? BIOTECHS have been the leading “risk” group. When the market starts selling the leading risk group, it usually means it’s the start of a “risk off” period.
We will have our longer weekend report tomorrow night as we have been in travel mode this weekend.