EARLY PRE MARKET

Futures down decently. My goodness. We may just get that whopping 1% bear market. (sarcasm)

Just remember what we have reported to you:

Our sentiment indicators have been flashing red for a few weeks. Bullishness and speculation have been rampant. Again, that does not mean a correction is ahead. Sentiment is a secondary indicator. It just means you are on the lookout.

Internals have been heading south. Again, this does not mean the end of the world is at hand but it means you are on watch.

New lows have been higher than new highs. This is amazing considering major indices have not budged.

TRANSPORTS have broken down at a minimum, on a short term basis.

Small caps have again started to under-perform.

Junk bonds have rolled over.

Financials have put in small to medium-size tops.

Again, all this with major indices not budging.

Just know these are the type of characteristics that lead to corrections of unknown price and time. One may or may not be at hand.

At this juncture, play it sector by sector, stock by stock. All kidding aside, we haven’t even seen a 3% correction since before the election. We are quite overdue.

We will be watching shorter term support levels on the majors as well as leading stocks and how they react to any selling. The 50 day average is 2-3% below these levels for the majors…so a little daylight to cover.