Hey, it has to go down once in a while. I’m already seeing the bulls opining about how this is the beginning of a “bigger thing”. Believe it or not, we are working off some overbought conditions which is very healthy, and you know I’m not a perma bull. If you look at the McClellan Oscillator, you can see that we saw an extreme overbought reading of about 148 on June 20. It’s now -56. As you can see, that uptrend line (white line) has been tremendous support going back to the Age of Pericles. Here is the chart below.
Biotech seemed to have gotten hit the hardest as names like BIIB, JAZZ, GWPH and others were victims of profit taking. Bottom line it was pretty much a red day across the board.
Solar stocks also got hit today, names like FSLR, TSL, SCTY were down 4-5% and the ETF TAN was down 3.4%
Markets could fall back 5% or more and still be in that unbreakable uptrend if you look at the monthly charts. They key is to use stops and not let small losses turn into bigger ones during a pullback. As a result we saw some stops today which is part of the program when risk gets taken off for a few days or a week.
See you on the morning.