What a nice run it was., but it ended today. Some will be calling today a top others will wait and see. From my experience reading charts there is a good shot that the Russell 2000 put in a short term top today.
The Trump rally was getting a little long on the tooth and people will at some point take profits. Today someone “blinked”, the question now is whether or not all the herd players will follow and sell as well.
I was very tempted to get long some TZA today (short Russell etf,) but as you know I’m a stickler for follow through days and one day does not a trend make. We will know in a day or two if the sellers mean business or not.
The Russell and the Nasdaq both went out at or on their lows, so there was no real bounce near the end of the day. Not bullish, but hey, we needed a rest.
There is some interesting movement out there now, some really bad charts that just rallied because everything else rallied, now look vulnerable again. Some etf’s that have been stellar, showed signs of some exhaustion today.
A good example would be the regional bank etf KRE
XLE -energy stocks also saw decent profit taking.
Seasonality is probably on our side though.
Similar to the period leading up to Thanksgiving, the Santa Clause period is usually friendly to stocks, so hopefully those bullish reindeers can keep that yule log cooking a bit longer.
Some of the infrastructure stocks that have been hot saw profit taking today, but the steel etf SLX made more new highs.
Refiners got whacked today, they have rallied so they took profits.
Biotech also saw some profit taking. IBB was only down 1.5% but the XBI was down 3.5%. Biotech needs a big fat M&A deal to be announced to get this sector lit up again.
One thing that I have noticed lately is that European etf’s like EWG EWI EWQ EWP are quietly rolling over again.
EPV which is an etf that shorts Europe is building a very bullish base lately. Is there something cooking across the pond that we arent privy too?????
By the way, what’s happened to Greece lately? Looks like it got hit by a gyro truck.
Bottom line, it will probably get a little harder here, so just be aware.
See you in the morning.