Market Gets Welcome Rest, but It Won't Last

 | Feb 16, 2017 | 4:28 PM EST
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The winning streak continued for the DJIA but came to an end for the S&P 500 and Nasdaq. This morning it looked like there might finally be a little selling pressure but, once again, the dip buyers stepped in, the buy programs triggered and we ended up closing near the highs of the day. There hasn't been a weak close since a flat day on Jan. 9.

Breadth lagged today with 2,800 gainers to 3,900 losers, but there were still over 750 names hitting new 12-month highs. There weren't any major sector themes today, although financials lagged a little and precious metals exhibited a little perk.

This sort of pause in the action is exactly what is needed. The bears may have been hoping for a quick reversal but there are still too many buyers out there to let things slip too much. The correction only lasted a few hours and was barely more than a blip. The strong close further confirms that the market uptrend is still in good shape.

Stocks are badly in need of some consolidation of gains, so this was extremely healthy. So often, the dip buyers are so anxious to jump in that they barely allow a downtick. It still is not an easy market for stock picking as most things remain quite extended. The market can easily afford a few more days of rest, but the buyers are often too impatient to let that happen.

The trend is firmly in place and the pullback today may just be a pause that refreshes. Don't be in a rush to conclude that a topping process has started.

Have a good evening. I'll see you tomorrow.

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